RT Journal Article SR Electronic T1 Beating the Market: Dollar-Cost Averaging with the
Profitable Dividend Yield Strategy JF The Journal of Wealth Management FD Institutional Investor Journals SP 54 OP 66 DO 10.3905/jwm.2017.20.2.054 VO 20 IS 2 A1 Wai Mun Fong YR 2017 UL https://pm-research.com/content/20/2/54.abstract AB Extensive evidence shows that lump sum investing (LSI) beats dollar-cost averaging (DCA) in most stock markets. We show that DCA investors are not doomed to inferior returns. Motivated by the clean surplus accounting model of asset pricing, we consider a DCA strategy that invests in stocks with a high gross profits-to-asset ratio and high dividend yield. Using block bootstrap simulations of long-horizon (20-year) returns, we show that this profitable dividend yield strategy significantly outperforms LSI in the market index in many dimensions.TOPICS: Security analysis and valuation, simulations, performance measurement