Back in 2007 I thought I had a great trend following system. I was feeling pretty smug about the direction that my AI trend models were giving me (because it was up). Little did I know that I was just lucky. The markets were trending upwards and I was riding their coat tails. So it's fitting that to revisit my FXI calls from 2007 and see where are they now.
A little bit later in 2007, FXI split 3:1, so the price got cut by a third. For today's argument, assume the split happened at $115 (it was a bit higher than that).
Today FXI is trading at $39.93, which is just over $1 higher than if FXI split at $115. So it did a whole hell of nothing over 12 years. If you look at the chart, it's been nothing but a roller coaster. Up, then down, then up, etc.
Sure you could've picked up some FXI at the bottom of 2009 but who knew it would recover? Sure you could've picked it up when it touched $30 a share a few times over the years but maybe it would've gone lower.
What's the moral here? I don't think there is any except that dollar cost averaging is good and buying when people are scared is better.
Seriously though, dollar cost averaging is WAY easier than buying when people are scared because sometimes it's better to stay out of their way. No one wants to catch a falling knife, now do they?