THE COMPARISON OF DOLLAR-COST AVERAGE AND VALUE-AVERAGE, LUMP-SUM INVESTMENT STRATEGY IN SETHD

Abstract

The purpose of this study was to compare the investment strategies of Dollar-Cost Averaging (DCA), Value Averaging (VA), and Lump Sum (LS) in the list of SET High Dividend 30 Index (SETHD). The stock prices of 29 companies were collected from SETSMART system from 2017 to 2021. The stock prices of 29 companies were generated for the 27 portfolios with investment periods of 1 year, 3 years, and 5 years. Inferential statistics were applied, and a paired sample t-test was used to compare the different return on investment strategies by using pair comparisons: DCA matched with VA, DCA matched with LS, and VA matched with LS. The research results showed that: 1) The VA strategy has a higher rate of return than the DCA and LS strategies for 1 year investment period, with a statistical significance level of 0.05; 2) The VA strategy has a higher return than the DCA and LS strategies for 3 years investment period, with a statistical significance level of 0.05. 3) The VA strategy has a higher rate of return than the DCA and LS strategies for 5 years investment period, with a statistical significance level of 0.05. According to the research findings, new investors do not have time to track stock price indices or they do not notice the buying-selling signal in the stock exchange market. The new investors can apply the VA strategy to invest in stocks for 5-years period because the rate of return on investment against the risk is highest ratio.