The End of Dollar Cost Averaging in U.S Equity Market?

The whole entire retirement industry in US is largely built upon the concept of long term investing in equity market. Most conservative financial advisers will preach that the best way to invest is to follow dollar cost averaging method. Dollar cost averaging means that we invest a constant amount of fund consistently every month to purchase stocks regardless of economic conditions. Overall, we will come out as a winner who pay less that the average market prices over an extended period of time. The assumption behind the soundness of this dollar cost averaging method is that the return of the equity market should be around 6% each year higher than the risk free assets ( treasuries). Therefore, according to this theory, we should not care how the market is going to do tomorrow; in the long run, we should be making 6% better than the risk free assets.

First Reason:
Recently, a paper was published called " "Are Stocks Really Less Volatile in the Long Run?" by Lubos Pastor, a finance professor at the University of Chicago, and Robert F. Stambaugh, a finance professor at Wharton. Basically, the content argues that, while the famous finance professor Jeremy Siegel’s research shows that mean reversion is a definite force over extended periods of time, uncertainty about market volatility also increases as the holding period is prolonged. That implies that the "long term" is risky because its difficult to predict what will happen in the future

Second Reason:
US economy will rebound of course from the current level in the next year or so. However, the fundamentals of what made up the economy have been damaged considerable. Consumers will become savers. People learn from their mistakes of overleveraging and will be more careful in spending. The intermediate growth of the economy t as whole if we are lucky if we can reach more than 4% per annum after the economy stabilizes. Additionally, the recent punishment of risk taking behaviors of our economic participants is profound enough to leave a traumatic mark for years to come.

What is OUR HOPE that can negate this two adverse effects:
US economy is famous for its resilience quality. Almost in every downturns, history had repeated itself. There will be always a creative force that produce a new techology or major inventions that can refuel our ailing economy. Inventions from the previous recession are for example, the motion picture and personal computer industry.