I see advice here to dollar cost average when the market is low and take your winnings out when it is high. This is nonsense and it requires timing the market. Dollar cost averaging decreases time in the market versus lump purchases. Cashing out your winnings incur taxes.
The winning strategy is to Buy, Borrow, Die:
- Buy as early as possible, don’t DCA, don’t time the market
- Borrow against your appreciating assets so you can buy more appreciating assets (real estate). You can use dividends, rent collection, and loans to pay for your lifestyle. Since you use valuable appreciating assets as collateral for your loans, you can get very low interest rates that you pay using dividens and rent collection.
- Die, and gift your assets and debts to your family’s trust. When they inherit your assets, the cost basis resets so they can sell some winnings to pay off your debts without incurring taxes. Note that this is the only time when winnings are sold, upon death. Otherwise you NEVER SELL!