To The Moon

Hello fellow 🐯🐯🐯, this is part 2 of my 🐯Auto-Invest series, so if you haven’t read my earlier post, do click on the Snoopy Icon to reach my homepage to read 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.

🔎Background:

As a researcher at heart, I’m always full of new ideas and hypotheses even for my investing, and I love to test my hypotheses to proof or refute them🧐 I’ve been thinking of trying 🐯Auto-Invest (which employs the DCA concept) for some months now…However, I didn’t have the spare time and I wasn’t a 100% bought-over by what I read about DCA until I tested it for myself so I procrastinated😅 until a few of my AWES💜ME 🐯 buddiesdiscussed 🐯Auto-Invest with me on several occasions. In March, I finally got down to testing it and I’m now able to present you my mini-research results🧫🔬👩🏻‍🔬 Heartfelt Thanks to them❣️My research questions for this post are:

(1) Will 🐯Auto-Invest give a lower cost price than me manually queuing for my target🎯 price❓

(2) How effective is 🐯Auto-Invest in capturing low trading prices❓

👩🏻‍🔬Method For Research Questions:

(1) I signed up for 4 auto-invest daily plans. I chose an index-based ETF, a popular tech stock, a defensive stock, and a controversial tech stock.

(2) I did a $7 plan for Bank of America (BAC), a $5 plan for the SPDR Portfolio S&P 500 Growth ETF (SPYG), and a $1 plan for Advanced Micro Devices (AMD) and Palantir (PLTR).

Example:

(3) I continued to monitor the market and share prices as I would daily and put in my target🎯 order in my demo account.

Example:

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

🕵🏻👩🏻‍💻Research Results:

SPYG: 🐯Auto-Invest average cost/share with fees included was 0.58% ($0.31) better than mine.

BAC: 🐯Auto-Invest average cost/share with fees included was 1.09% ($0.32) better than mine.

AMD: 🐯Auto-Invest average cost/share with fees included was 1.16% ($1.07) better than mine.

PLTR: My order is still queuing. 

🤔💭: Will 🐯Auto-Invest give a lower cost price than me manually queuing for my target🎯 price❓

(1) Over the last 15 sessions, I managed to purchase SPYG, BAC, AMD, and I’m still queuing for PLTR at $7.50 in my demo account. Without fees, I only won 🐯Auto-Invest by $0.03/share for BAC😅 & if I include fees, 🐯Auto-Invest wins for all 3 stocks🏆🏆🏆

(2) I started my 🐯Auto-Invest before the bank crisis (not knowing it would happen of course because there was no warning signs before that😓) and when it happened my BAC was down quite a bit, however DCA-ing was effective in reducing my loss and my current loss only stands at 0.95%😲🤗🥳

(3) Even though I was awake and monitoring market conditions and prices closely, I still missed buying AMD at $78+ because I was waiting for it to drop more. In the end, when I finally accepted that AMD might not be dropping and I had to do an “emergency” buy, my average cost per share (fees included) was $1.10 more expensive that 🐯Auto-Invest.

🥁🥁🥁Conclusion 1 ➡️ If there was a sudden short crash for a particular stock, 🐯Auto-Invest can effectively reduce my losses. Also, I could have averaged down by buying more fractional shares when the stock was deep in the red on top of DCA-ing to get a lower average cost/share. With fees included, for the above 4 types of stocks I chose, 🐯Auto-Invest was successful at obtaining a lower average price than me who had spent many hours monitoring market conditions and share prices😲 This means that I can just leave 🐯Auto-Invest to do its job and save a lot of time and not have to monitor 🇺🇸 stock prices late into the night🤗🥳

🤔💭: How effective is 🐯Auto-Invest in capturing low trading prices❓

⭐️ See bolded daily prices In table above

⭐️ SPYG: 53.33% of the time (8/15 orders), 🐯 obtained a lower price than the average price of the day.

⭐️ BAC: 60% of the time (9/15 orders)

⭐️ AMD: 46.67% of the time (7/15 orders)

⭐️ PLTR: 60% of the time (9/15 orders)

🥁🥁🥁Conclusion 2: 55% of the time (33/60 orders), 🐯Auto-Invest captured a lower price than the average price of the day👍🤗🥳 This is a totally unexpected positive finding😃

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

📌 Does DCA-ing Daily/Weekly/Monthly Matter🕵🏻‍♀️🕵🏻‍♂️❓

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

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

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