Sheamus_1852 t1_j6dihkl wrote on January 29, 2023 at 4:09 PM

This post is vastly skewed for multiple reasons.

Quite literally every company will show that way if you lump sum when the company starts. You’re basically angel investing then. DCA isn’t made for that kind of investment.
The argument is for mature companies. Track DCA for MSFT, SPY, or any fairly mature and stable security and DCA will come out on top. Post this same time frame for MSFT lump sum v DCA.
With the meme nature around the cult of Tesla, I would never DCA here. It’s not predictable. Elon tweets an insult at someone the stock jumps, he sells shares to buy Twitter then stock plummets. Their share price is only partially indicative of their performance as a company and partially investor sentiment around Elon’s psychosis.
Similar to point 1, choosing the bottom is easy in hindsight. Any idiot can look at a chart and say yeah it’s a no brainer to lump sum 8/1/19. The point of DCA is that you live in reality that it is difficult to predict the best bottom. Quite literally at the peak in 11/2021 people on here were still advocating for lump sum because stocks only go up. Lump sum is a gamblers mentality, DCA is a savers mentality.

Picksologic OP t1_j6dorna wrote on January 29, 2023 at 4:51 PM

The chart is skewed due to ignorance, not intention. I'm not advocating for DCA, just learning how to make graphs in Excel and picked two metrics which in this case are not appropriate. In any case the feedback I'm getting is really helpful. I think I will try charting a mature company as you suggested although it might be hard to pick a random start point.

Sheamus_1852 t1_j6dv9lj wrote on January 29, 2023 at 5:33 PM

Totally understand. Great chart design. Definitely do a mature company. Thanks for being humble rather than defensive.

Jolly-Feed-4551 t1_j6dyinj wrote on January 29, 2023 at 5:54 PM

I was going to point out that in a bull market you are obviously going to make more money by investing a lump sum early (or DCA early) than keeping most of your money uninvested for the better part of a decade, but this comment puts it into context for me. As far as the visualization itself, I am confused why orange is labeled as $15,084 initial investment in the chart but the description says $15,100. I would also like to see the total DCA investment identified, I assume the DCA investments are made on the first of each month but you don't say specifically.

Picksologic OP t1_j6e8451 wrote on January 29, 2023 at 6:55 PM

The discrepancy in the start amount is me trying to learn formulas as well as graphing.. It should be $15,100. The total DCA investment is also $15,100, with the investment on the first of the month. I mistakenly assumed that having the x axis dates on the first of the month was sufficient, but will keep that in mind for the next time.