motivated by a discussion at Early Retirement.
Once upon a time I compared investing $12K all at once, or 12 monthly investments of $1K
(where you stick what you haven't invested in Money Market).
>That's Dollar Cost Averaging, eh?
Yes, DCA. In that earlier (ancient?) tutorial
(at the bottom) we had all the monthly returns for the S&P 500, from year 1928 to year 2001 and
considered a random 12month sequence
(chosen from that time period) and compared the two rituals.
Now I want to consider an arbitrary portfolio made up of four assets, where you get to choose the allocation, like 25% Asset A + 35% Asset B + ...
>So?
First you download ten year's worth of asset prices, like so:
Then you get to choose your allocations, like this:
Click on picture to download the spreadsheet.
Then, each time you click F9 you get a different 12month sequence
(selected from the 10years worth of returns).
You also find out whether DCA or Allatonce wins.
You also get a bunch of charts:
[1] The 12 month evolution of the unit price, starting at $10.
[2] The 12 month evolution of a Portfolio: DCA and Allatonce.
[3] The units purchased each month (when you do the DCA thing).
[4] The cumulative total of units purchased each month.
(That doesn't change for allatonce. It's $12,000 / $10 = 1200 units.)
If DCA gets you more units (after 12 months), then DCA wins!
If'n you get tired of pressing F9, you can click a button:
Then you get a bunch of F9 repetitions (or however many your choose, like 500 iterations, in the above example).
You also get the percentage of times that Allatonce won.
(In the above example, it was 60.4% of the time.)
>Then what?
That's it!
