How to put money in the market

For years I had a set dollar amount automatically taken from my bank account and invested in mutual funds. It's called dollar cost averaging. When stocks are down, you get more shares. When they're up, you get fewer. Seems like a good way to buy low and sell high.

Well, someone did some research. If you have a pile of money -- which I didn't -- should you feed it into the market using dollar cost averaging or just pour it all in? Gregg S. Fisher, president of Gerstein Fisher, an independent investment advisory firm, says it might be smarter to dump a lump sum in the market all at once.

Perhaps contrary to what most investors would expect, our research revealed that the best performance consistently comes from Lump Sum Investing, with average annualized outperformance over DCA of nearly two percentage points over a period of 20 years.

There are variations on the theme.

The second-best performance came from the Momentum Dollar Cost Averaging strategy, whereby the monthly amount invested is ratcheted up on the heels of good market performance. Over the period we examined, this strategy achieved superior returns when compared to the basic DCA approach more than 50% of the time.  (More money is invested following a month of positive market returns; less following a month with negative returns.)

This market is so scary it might be best to use CCA -- closet cost averaging. Hide in there and cover your eyest.