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THIS

This single diagram explains the market dynamic year over year in a way I've never seen anywhere else. The 1/3/5/10 yr returns figures you see don't even come close to understanding the nuances of one year over another.

I remember when this diagram was published in 2011 and _still_ refer to it routinely.

This is why you do dollar cost averaging and steadily invest every year, to spread out your investments over multiple years.

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I'm glad you like it but I don't follow how you infer dollar cost averaging from this. There's no statistical advantage to dollar cost averaging over lump sum investing (actually the opposite due to the median return beating inflation). I'd argue the main benefit is a realistic expectation and understanding of the range of returns to help you plan better.

Dollar cost averaging doesn't have a better expected value than lump sum investing, but it should have a lower variance, no?

Also, there's dollar cost averaging like "I have a lump sum now, but I will invest it slowly over the next 2 years" and there is dollar cost averaging like "I will invest money as it comes in slowly over the next 2 years instead of saving it up and investing it as a lump sum then". The former is the technical definition, but the latter is what most people mean when they use the term informally...

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