Double let's you move money between your strategies over time. We call this Dollar Cost Averaging (DCA) but it has some specifics that differ from normal DCA that you should know about.
What is Dollar Cost Averaging?
Schwab says:
Dollar cost averaging is the practice of investing a fixed dollar amount on a regular basis, regardless of the share price.
This definition only takes into account moving into a position from cash on a DCA basis. With Double, you can invest into and move out a position over time. This happens on the Portfolio Change screen which can be accessed here.
How to Dollar Cost Average on Double
It starts by updating your Strategy target weights. Once these sum to 100%, you should be able to select a timeframe for the change. If you toggle "Schedule this over time" you are setting up the change to perform at a number of intervals.
You can choose a frequency of Daily, Weekly, Quarterly or Custom. Custom allows you to pick your own schedule, for example every 3rd Monday.
You will see a list of dates on the right hand side that showcase the actual upcoming trading days where a change will take place. If your change would normally occur on a holiday, Double handles this by choosing the nearest trading day.
Implementing Dollar Cost Averaging
On the morning of every trading day, Double checks for changes that are scheduled on that day. If a change is scheduled we update your portfolio's target weights. These can been seen on your Portfolio page. Notably this will usually happen before any trading occurs for that day. Our portfolio optimizer considers the new target weights, and based on it's decision, Double will make the optimal trades for that day. In practice, this could lead to some change dates with no trades being made if the incremental change to the target weight is very small.
What happens between change dates
During an active portfolio change on a frequency that is not Daily, Double puts your account into Hold mode on the trading days with no scheduled change (read more here). Effectively, this means Double will not trade at all. This is to ensure Double does not make non-optimal trades on your behalf right before an upcoming change (for example, it would be non-optimal to sell something to match a target right before that target is about to change). This is to prevent potential wash sales and lower drift in your portfolio.
Canceling a Portfolio Change
You can always cancel a portfolio change from the Portfolio page by clicking on "Active Portfolio Change" and then clicking Cancel
