Set Default Values
Dollar Cost Averaging
Dollar Cost Averaging involves dividing up the total amount to be invested across regular intervals, regardless of the market conditions.
Instead of investing a lump sum all at once, an investor using DCA might buy a fixed dollar amount of a particular investment, such as shares of a stock or mutual fund, at regular intervals—be it monthly, quarterly, or any other fixed period.
Over time, this approach allows the investor to buy more shares when prices are low and fewer shares when prices are high, potentially reducing the average cost per share over time.
Advantages of Dollar Cost Averaging
- Mitigating the Impact of Market Volatility stock markets can be unpredictable. By spreading investments over time, DCA can mitigate the impact of short-term market fluctuations and lessen the risk of making a substantial investment right before a market downturn.
- Simplicity and Discipline,DCA can be particularly suitable for beginners. It requires less knowledge about market timing and more about commitment to a disciplined and consistent investment plan. This simplicity removes the emotional component, which can often drive hasty or regrettable decisions.
- Affordability: Since DCA doesn't require a large sum of money to start, it is an accessible strategy for many investors. For example, instead of waiting to save $12,000 to invest at the end of a year, an investor could allocate $1,000 per month throughout the year.
Portfolio Investment Dollar Cost Averaging Back Tester
Here you can back test you Dollar Cost Averging strategy by picking a investment (selection includes stocks,etfs, bonds...etc), staring amount, Recurring Buy Amount and date periods for which to run your investments against.
The investment is always bought at the end of the last trading day of the month.
Select Investment
Here you can search and select investments based on what is available in yahoo finance.
Start Amont
The amount in Dollars that will be bought at the beginning of the period.
Recurring Buy Amount
The amount that will be bought recurringly based on the buy strategy.
Start Date
The begin date of the buy period, note that the start amount will be bought on the closed trading date to this date.
Sometimes certain investments will not have this exact start date, for example if you want to buy in a 10 year period but the investment was only started 2 years ago. The start date is noted in the results, check for this if you want to be certain about the date.
End Date
The end date of the period, this might not be exact again and the closed trading date to this one will be found.
Check the results where the end date is noted to be certain aboud the date.
Buy strategies
Here you can select several strategies of how, either with a time interval or under certain conditions to buy investestments:
- End of the month: buys the investment at the last trading day of the month Dividend is not used in these calculations. - Endd
Calculation as done in python with pandas and with yahoo finance (yfinance) for stock data.
Dollar Cost Averaging involves dividing up the total amount to be invested across regular intervals, regardless of the market conditions.
Instead of investing a lump sum all at once, an investor using DCA might buy a fixed dollar amount of a particular investment, such as shares of a stock or mutual fund, at regular intervals—be it monthly, quarterly, or any other fixed period.
Over time, this approach allows the investor to buy more shares when prices are low and fewer shares when prices are high, potentially reducing the average cost per share over time.
Advantages of Dollar Cost Averaging
- Mitigating the Impact of Market Volatility stock markets can be unpredictable. By spreading investments over time, DCA can mitigate the impact of short-term market fluctuations and lessen the risk of making a substantial investment right before a market downturn.
- Simplicity and Discipline,DCA can be particularly suitable for beginners. It requires less knowledge about market timing and more about commitment to a disciplined and consistent investment plan. This simplicity removes the emotional component, which can often drive hasty or regrettable decisions.
- Affordability: Since DCA doesn't require a large sum of money to start, it is an accessible strategy for many investors. For example, instead of waiting to save $12,000 to invest at the end of a year, an investor could allocate $1,000 per month throughout the year.
Portfolio Investment Dollar Cost Averaging Back Tester
Here you can back test you Dollar Cost Averging strategy by picking a investment (selection includes stocks,etfs, bonds...etc), staring amount, Recurring Buy Amount and date periods for which to run your investments against.
The investment is always bought at the end of the last trading day of the month.
Select Investment
Here you can search and select investments based on what is available in yahoo finance.
Start Amont
The amount in Dollars that will be bought at the beginning of the period.
Recurring Buy Amount
The amount that will be bought recurringly based on the buy strategy.
Start Date
The begin date of the buy period, note that the start amount will be bought on the closed trading date to this date.
Sometimes certain investments will not have this exact start date, for example if you want to buy in a 10 year period but the investment was only started 2 years ago. The start date is noted in the results, check for this if you want to be certain about the date.
End Date
The end date of the period, this might not be exact again and the closed trading date to this one will be found.
Check the results where the end date is noted to be certain aboud the date.
Buy strategies
Here you can select several strategies of how, either with a time interval or under certain conditions to buy investestments:
- End of the month: buys the investment at the last trading day of the month Dividend is not used in these calculations. - Endd
Calculation as done in python with pandas and with yahoo finance (yfinance) for stock data.
Reference: The pandas development team pandas-dev/pandas: Pandas. Zenodo https://doi.org/10.5281/zenodo.3509134.
Investment