To The Moon

Hello fellow 🐯🐯🐯, this is part 3 of my 🐯Auto-Invest series, so if you haven’t read my earlier posts, do click on the Snoopy Icon to reach my homepage to read:

(1) My introduction on Dollar-Cost-Averaging (DCA) where I debunked a common misconception that ❌DCA = Averaging Down❌ and compared the pros and cons of DCA 🆚 Averaging Down 🆚 1-Time Purchase.

(2) Real Life Example In Action🎬: My purchase price 🆚 🐯Auto-Invest price

🔎Background:

When I couldn’t decide what was the best auto-invest plan to be on, I discussed with 1 of my nice 🐯buddies and was laughed at🤭 when I said I was thinking of doing $1 daily for each stock. I know it’s duh…but to my creative brain🧠, it was like: 🤔💭 If I really believe that DCA works, then the best frequency should be daily as I would literally minimise all the day-to-day volatility and would only have to deal with intra-day volatility❓Thus, this research question was birthed: During a 🐻bear market, would there be a difference to my average cost price/share if I did DCA Daily 🆚 Weekly 🆚 Monthly❓

👩🏻‍🔬Method For Research Questions:

(1) I extracted the daily high, low, and average trading prices for the current 🐻bear market (3/1/22-14/3/23) for all the stocks listed onto an excel sheet.

⭐️ I chose these stocks as I wanted a mix of index-based ETFs, Warren Buffett’s famous BRK-B, defensive stocks, popular tech stocks, and a controversial tech stock. I also added in other stocks that had the highest number of auto-invest plans in 🐯Brokers to test if Daily 🆚 Weekly 🆚 Monthly investments would make a difference to the average cost price.

(2) As my 2nd post showed that 🐯Auto-Invest captured a price similar to the average price of the day, I used the daily average price as a guide to calculate an estimated DCA price.

(3) I used $1 Daily, $5 Weekly, and $20 monthly (20 sessions) to calculate the number of shares I would have gotten and the average cost per share.

⭐️ It was interesting to note that more 🐯🐯🐯 were on the Weekly and Monthly Auto-Invest Plans as compared to the Daily plans❣️A MILLI❤️N Thanks to @TigerTradingNotes for extracting theuseful data to help us invest better💕💕💕

*Disclaimer: The above stocks are not recommendations for DCA/🐯Auto-Invest. I chose these stocks for experimental and educational purposes only*

🕵🏻👩🏻‍💻Research Results:

I provided a $300 and $3000 investment table for your easy reference but the amount invested will not affect the research results. The average price/share would still be the same and we would just get proportionately more shares if we invested more.

🤔💭: During a 🐻bear market, would there be a difference to my average cost price/share if I did DCA Daily 🆚 Weekly 🆚 Monthly❓

(1) For the above chosen stocks, a Daily DCA plan obtained a lower average cost/share for 64.7% of the stocks (11/17)🥳🥳🥳

(2) Daily DCA was the best for all 3 index-based ETFs (SPY, QQQ, and VOO), for both defensive stocks (BAC and KO) and for some most tech stocks (GOOGL, AMZN, APPL, META, TSLA, and PLTR). Surprisingly, MSFT, TSLA, NVDA, BRK-B, and the 2 energy stocks were better off on weekly DCA plans.

(3) The average cost/share between Daily 🆚 Weekly DCA plan is not significantly different but it was a lot higher for Monthly DCA plans. By using a Daily as compared to a Monthly DCA plan, we could have gained 4.12% more😉

🥁🥁🥁Conclusion:❣️Monthly DCA plans are definitely the worst for the above listed stocks during the recent 🐻bear market. This is a totally unexpected positive finding and I’m elated to know that my reasoning of a daily DCA plan was the best at obtaining the lowest average cost/share most of the time was right😃 Please note that this finding may not be generalisable to other periods until I have done further testing👩🏻‍🔬

Keep a lookout for the rest of my Auto-Invest posts later today & tomorrow:

📌 DCA Profit-Loss Analysis During A Bear Market💵/💸🐻

📌 Auto-Invest Toolkit🛠-Everything You Need To Know To Start Auto-Investing Today😉

Do follow me if you enjoy reading analytical stock research🔍 presented in a fun & easily understandable way😉 & for the Latest Stock & 🗞🗞🗞 Updates🕵🏻‍♀️❣️

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As usual-🤔💭 Consider POV & Actions of Investors + 👩🏻‍💻👨🏻‍💻 Research + 🗑FOMO & Greed = Investing Wisely 🤓🤗 + Accumulating Wealth 💵💰

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