One Year of Dollar-Cost Averaging into the S&P 500: A Look Back
I set up an automatic transfer of 500,000 won a month, and a year has passed. When it dropped as much as -10% midway, my hands were really shaking, but in the end, not touching it seems like the best thing I did.
The return is around +14% right now. Honestly, I do think a little that I should have moved it into a tax-advantaged account, but that's a separate matter I need to compare properly.
This year, I've decided to keep the amount the same and only check in once a quarter. Every time I opened the app my heart wavered, so I turned off all the notifications too lol
4 answers
Turning off notifications is truly the right answer—I live that way too.
Well, if your hands were shaking at -10%, I think that means you didn't yet know whether that was volatility you could actually handle. Rather than bragging about your one-year returns, I think it's more important to decide in advance how much drawdown you can endure. For me, I only felt at ease after cutting my position down to an amount I wouldn't be shaken by even at -30%.
If you’re at +14% over one year, you’ve weathered it well. But honestly, isn’t one year too short a sample? Not touching it during the -10% stretch is commendable, but whether that’s skill or just good luck is something you can only know after 5 years. I’ve been running automatic transfers for 3 years too, and I got confident from the first year’s return, then hit -25% in year two and lost my mind lol
Since we're on the topic of tax-advantaged accounts, let me ask just one thing. If it's 500,000 won a month, that's 6 million a year—if you've compared it with an ISA or pension savings, I'm curious how the calculation came out. Even just looking at the tax credit, pension savings is advantageous in that bracket, so it's a bit disappointing that it stopped at "something that needs to be compared." Isn't this just you putting it off?