I think, with the current and scale of restrictions imposed on social and travel, it is appropriate to call it a “non-normal” time." It might have some implications over the longer term, but things won’t stay like this forever. Most of it is temporary.
I am not saying one strategy will beat the other. But DCA is a way of reducing shorter-term volatility risk. And, I’d argue, downside.
Because this time is really different: For instance, the U.S. unemployment rate has sharply risen to 15% for April. It has multiplied over a mere weeks, and the figure is expected to surpass 20% for May. That’s the highest since the great depression 90 years ago. Yet stock markets like S&P 500 are only 10% below its all-time high reached mere weeks ago.
I don‘t think so. It is a special situation.
It’s a long-term journey. Like completing an assessment with a long exam, climbing a high mountain, or just covering a long distance to travel.
You aren’t going to get far by going slowly throughout, overanalyzing things to find the best route all the time, carefully weighing every step twice or thrice before taking it. Also, by standing still and doing nothing, you’ll be achieving nothing.
Yet, on an unknown und unforeseen route, there will be (a few) times when you’re lost and confused. In these moments it might be sensible to not blindly plough ahead - but take a few deep breaths and go at a slower pace. Aren’t you risking losing time that you’re not able to reclaim later? You are. But I think it’s still a sensible strategy in some circumstances.
If you compare valuations to a couple of months before, I think stock markets are right now either lost and confused - or an outright bet on things normalising swiftly, with virtually no economic outfall. I personally, I am a bit unsure and lost and confused, frankly. That’s why I’d take a cautious approach and dollar-cost average. Which is what I’m currently doing in fact.