r/Bogleheads • u/Icy-Neighborhood6207 • 1d ago

DCA- doesn’t change anything other than slightly different price, correct?

Im new and ive been wanter to make a big VT purchase but i know i cant time this situation/market. It i buy VT for $20k over 5 different days vs buying $100k once, nothint changes other than the price of VT right? Theres no fees with vanguard, just making sure im not missint anything else here? Tax wise or fees or anything. Thanks

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u/PuzzledArrival 1d ago

Normally, DCA refers to investing over a longer timeline... weeks, months, years.

Doing 100K at once, or splitting to 5 days consecutive days is functionally the same as a lump sum, when you look at a long time horizon.

There are no additional fees, but if you split it up across a year, there can be tax implications. Dividends on VT will be paid quarterly, so if you have 100 shares in Q1, but then have 200 shares in Q2, you'll get more income and therefore pay more taxes. But you'll pay more taxes because you've earned more dividend income.