Is it true that at a certain point in the long term index fund DCA-ing process, it’ll be virtually impossible for even the worst market crash to cut into principal?

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I don’t think that index funds or dca have anything to do with it. If you invest $100 and it grows to $200. A fifty percent crash will get you back to your principal. Over long periods of time your gains will hopefully much greater than 50 percent. Assume the market returns around 10 percent a year on average. So after 20 years you have probabaly around $800. It would take a tremendous crash to get you below your 100 originally invested.

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Basing this on a compound interest calculation. At an average growth rate of 7%, if you invest $1000/month then after 20 years your contributions will be 240k but the market value will be just shy of half a million. The market would have to drop by over 50% to dip below total contribution value.

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That is really just part of the return. If the 7 doesn’t include it you are closer to 9%

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Which principal? If avg. cost then definitely can crash below that. Maybe not the lowest cost if you've DCA-ing for a decade or so.

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