What I was thinking is to say that I want, for example, to have a portofolio comprising 20k CHF of stocks at the end of the year and that I plan to invest every quater starting from 0 CHF.
This means that I want my total stock shares to grow 5000 CHF every quarter. Based on that, if the market price increases between two quarters, I’ll have to buy less shares to match my desired growth and I’ll buy more shares if the market price decreases.
Now, the difference between DCA is that I don’t know how much I’ll end up investing at the end.
If the market price increases too much, I’ll might not invest as much as a wanted and have some left over cash. But that may be a good thing to keep this cash and invest it when (if) the market goes down later.
If the market price decreases too rapidly, I may invest all my cash before the end of the year. But again that may be a good thing…
I was think of using this strategy just for investing the cash I currently have and then switch to the much simpler DCA when I’ll be just investing what I’m saving.
The best would be to run a few simulations to understand the long term effects of VCA vs DCA in this scenario. I might try it if I find the time.
I’m really new to all this, so If you have remarks or if you see a fundamental flaw in my reasoning, please let me know!
Also, if someone has something to say about my previous question about rebalancing when stocks and cash/bonds are not in the same currency, I’m still interested!