The risk in the within horizon: a test applied to dollar cost averaging

Dollar Cost Averaging refers to an investment methodology in which a set dollar amount is invested in a risky asset at equal time intervals over a holding period. Our paper compares the advantages and risk of this strategy from the point of view of a saver. Many theories focused on the ine¢ ciency of this strategy compared to other non discretionary strategies in terms of performance but, in the real world, DCA is often used for its straightforwardness. Besides we o¤er a comparison between DCA and Lump Sum focusing on the risk the investor bears during the entire investment horizon and not only at the end of the period. This risk in the within horizon is measured in particular with First Passage Time Probability and Expected Minimum Portfolio Value applied to portfo- lios simulated with Monte Carlo and di¤erent types of Bootstrap (block, stationary and residual sampling).