Lump vs DCA with real data

[spectre71]

Lump some purchase at the first of the month from Jan 1, 2019 to August 1 2023, 56 weeks hence $5600 dollars. This is so I  can apples to apples with DCA. I know it's very aggregate and course data. 2021 and 2022 to current 8/23 would suck. Sure more finite data is cool (I have it) but this is an exercise. We don't have the luxury of looking at history and saying oh I woulda/shoulda/coulda done this blah blah blah. I could do it on the weekly or daily and it looks way different for sure, but I ain't giving it away, not sorry. What is really cool isn't some head and shoulders and falling wedge crap, It's a added the news in another column that affected it.

$5600 number is stems from 56 weeks.

Lump

2019      BTC      Lump    BTC PUR   Final amount at 8/2023
Jan    $3,843.52    $5,600    1.45 BTC   $43,237.47   

Using August 1 2023 as the sale date
Aug    $29,675.73

DCA

Now using DCA at 100 per month

Month   BTC on 1st    @100permonth
   
2019                      BTC   
Jan    $3,843.52    0.026   
Feb    $3,487.95    0.0286   
Mar    $3,859.58    0.0259   
Apr    $4,158.18    0.024   
May    $5,402.70    0.0222   
Jun    $8,564.02    0.0116   
Jul    $10,583.13    0.009   
Aug    $10,399.67   0.0096   
Sep    $9,757.97    0.01   
Oct    $8,343.28    0.012   
Nov    $9,261.10    0.0107   
Dec    $7,424.29    0.0134   
2020         
Jan    $7,200.17    0.0138   
Feb    $9,392.88    0.0106   
Mar    $8,562.45    0.0116   
Apr    $6,606.78    0.0151   
May    $8,864.77    0.0112   
Jun    $10,167.27    0.0098   
Jul    $9,228.33    0.0108   
Aug    $11,759.59    0.0085   
Sep    $11,970.48    0.0083   
Oct    $10,619.45    0.0094   
Nov    $13,737.11    0.0072   
Dec    $18,803.00    0.0053   
2021         
Jan    $29,374.15    0.0034   
Feb    $33,573.18    0.0029   
Mar    $49,631.24    0.002   
Apr    $59,095.81    0.0017   
May    $57,828.05    0.00173   
Jun    $36,684.93    0.0027   
Jul    $33,572.12    0.0029   
Aug    $39,974.89    0.0025   
Sep    $48,847.03    0.002   
Oct    $48,116.94    0.002   
Nov    $61,004.41    0.0016   
Dec    $57,229.83    0.0017   
2022         
Jan    $47,686.81    0.002   
Feb    $38,743.27    0.0025   
Mar    $44,354.64    0.0022   
Apr    $46,281.64    0.0021   
May    $38,469.09    0.0026   
Jun    $29,799.08    0.0034   
Jul    $19,269.37    0.0051   
Aug    $23,314.20    0.0042   
Sep    $20,127.14    0.005   
Oct    $19,312.10    0.0051   
Nov    $20,485.27    0.0048   
Dec    $16,967.13    0.0058   
2023         
Jan    $16,625.08    0.006   
Feb    $23,723.77    0.0042   
Mar    $23,646.55    0.0042   
Apr    $28,411.04    0.0035   
May    $28,091.57    0.0035   
Jun    $26,819.97    0.0037   
Jul    $30,590.08    0.0032   
Aug    $29,675.73    0.0033   
      
         TOTAL      0.42813   12,705.00
      
   

[franky1]

your maths is off..

you lump 5600 PER YEAR meaning $28k invested since 2019
but when you DCA you only do 100 a month for 56 months.. which is only a single 5600 for total of all years

you might have done better if you DCA $500 a month for 56 months to also be a comparable $28k input for all years
or you done $100 a month DCA with $1200 a year lump.. to atleast be fairer

but anyway using your numbers
your 5600 per year lump earned you 2.863btc.. which if you did only invest $1200 lumps per year would be 0.5726btc

yep lump 0.5726
vs DCA    0.42813

[spectre71]

No it's just my crappy cut and paste from excel

I was showing if you would have lumped at first of any Jan 1 from 2019 - 23 what that amount would be at 8/1/2023.... It not cumulative, sorry.

I wanted to go back far enough to get an election and a halving in there. Looking at it now I want to redo it so it formats better. I'm also thinking of omitting 2018 and 2019, those were immature growing years, I don't think they are indicative how things are going forward really. redux coming when I some time

[iBaba]

No it's just my crappy cut and paste from excel

I was showing if you would have lumped at first of any Jan 1 from 2019 - 23 what that amount would be at 8/1/2023.... It not cumulative, sorry.

I wanted to go back far enough to get an election and a halving in there. Looking at it now I want to redo it so it formats better. I'm also thinking of omitting 2018 and 2019, those were immature growing years, I don't think they are indicative how things are going forward really. redux coming when I some time

Redo it so we can get a clearer view of the fogures. In the subject, you added ...with real data... So let those data be real and easily digested. You can also make use of the image format here to represent.

However though, some out there thinks DCA has higher portfolio value than the Lump sum but I don't think that is correct. What would be more correct is that the Lump sum has more portfolio value than the DCA when you considered the funds. But why the DCA is kinda appealing to the investor is because it could reduces great lost after subscribing to the investment fund in a monthly basis for instance over long time. Some will say because of the volatility of the market, it id better we focus on DCA instead of Lump sum. In the end. It is the choice of the investor to take.

[Tytanowy Janusz]

From a statistical point of view, there is no difference at what intervals you do DCA (whether once a month or once a year), and the differences we observe in your experiment are only small sample error.
You took only 1 asset into the experiment, only on 1 interval (from 2019 to 2023). Perhaps if you decided to buy LUMP once a year, but not in January but in June, the result would be the opposite.

I'm also thinking of omitting 2018 and 2019, those were immature growing years, I don't think they are indicative how things are going forward really. redux coming when I some time

Immature growing years were in 2010-2014.

[DVlog]

From your data, it is clear that lump sum investments outperformed DCA's strategy. 

Both strategies have their upside and downside, and they both need specific scenarios to outperform each other. If an asset has the potential to rise constantly in the long term, then a lump sum investment will give a big return, but the investor needs to have a reasonable amount of funds upfront. But if the market is volatile and it runs like waves, then DCA will help an investor reduce the impact of the volatile market in his portfolio. In general terms, lump sum investment seems to better-performing strategy, but if the price of that asset goes down and stays there for a very long time, then it will be a big loss for the investor. 

There are some downsides that i noticed with these strategies.

1. They are both extremely good, but a more dynamic approach can give investors better ROI. Without buying everything in one shot, you can make a lump sum investment in every notable dip. This might provide a better yield.

2. Buying small amounts every month seems like a better choice in a volatile market condition, but frequent buying activity might charge significant fees over time. I think these fees were ignored in the calculation. 

In my opinion, why sticking to one strategy when we can make a combination of both and create a better one according to market conditions. For example, we can lump sum in a notable price dip and perform DCA when the market moves sideways. This gives our strategy more flexibility. Also, making some tweaks to our strategy in different market conditions is a good practice as an investor. 

[Wind_FURY]

No it's just my crappy cut and paste from excel

I was showing if you would have lumped at first of any Jan 1 from 2019 - 23 what that amount would be at 8/1/2023.... It not cumulative, sorry.

I wanted to go back far enough to get an election and a halving in there. Looking at it now I want to redo it so it formats better. I'm also thinking of omitting 2018 and 2019, those were immature growing years, I don't think they are indicative how things are going forward really. redux coming when I some time

But wouldn't that be cooking/manipulating the data? It might be "immature/growing years" in your own opinion, but it's still real and actual data no matter how your opinion says about it.

[spectre71]

Sorry, it was 3am and couldn't sleep so I fiddled with this, it's 32 weeks not 36, oops. I am an excel hack at best, I really need to take a course and learn it's true power.

LUMP

Lump sum $3200 (32 weeks worth) 1/21/2023
Sale date 8/1/2023 BTC of $3232.84

DCA

32 weeks DCA AT $100 per month

2021         
Jan    $29,374.15    0.0034   
Feb    $33,573.18    0.0029   
Mar    $49,631.24    0.002   
Apr    $59,095.81    0.0017   
May    $57,828.05    0.00173   
Jun    $36,684.93    0.0027   
Jul    $33,572.12    0.0029   
Aug    $39,974.89    0.0025   
Sep    $48,847.03    0.002   
Oct    $48,116.94    0.002   
Nov    $61,004.41    0.0016   
Dec    $57,229.83    0.0017   
2022         
Jan    $47,686.81    0.002   
Feb    $38,743.27    0.0025   
Mar    $44,354.64    0.0022   
Apr    $46,281.64    0.0021   
May    $38,469.09    0.0026   
Jun    $29,799.08    0.0034   
Jul    $19,269.37    0.0051   
Aug    $23,314.20    0.0042   
Sep    $20,127.14    0.005   
Oct    $19,312.10    0.0051   
Nov    $20,485.27    0.0048   
Dec    $16,967.13    0.0058   
2023         
Jan    $16,625.08    0.006   
Feb    $23,723.77    0.0042   
Mar    $23,646.55    0.0042   
Apr    $28,411.04    0.0035   
May    $28,091.57    0.0035   
Jun    $26,819.97    0.0037   
Jul    $30,590.08    0.0032   
Aug    $29,675.73    0.0033   
   Input 100 week   32w   $3,200
   total BTC   0.10353   $3,072.32
   profit      (-$127.68)

This is an exercise of course, it depends on when you get in right? And out? Clearly one can't say that DCA is the best way automatically. But most of us don't earn or have meanifull lump sums and we put in what we have on hand. We also can't go back in time and change and cherry pick decisions. Looking at this, I think it a good idea to lightly manage your money on policy (example: At 133% above blended avg I will sell to 100% then rebuy in at 85%). Stick to a formula not what your emotional desired outcome is.

[Sim_card]

There are some unforseen obstacle that one will face in his bitcoin journey and what matters is how the investor can be flexible with his bitcoin accumulation strategy during those period of obstacle. Your data has proved which method is the best because for bitcoin,it is a volatile investment that one wouldn't know which way the market will go the next day. Your record is on past event which can only be used to speculate the price of bitcoin and not to tell or say the best strategy that one can use to accumulate bitcoin in a circle. We dont know the next price movement if it will dip more or pump,DCA is the only way for you to stay on track with your investment because it makes it easier for you to accumulate without stress disregard the price of bitcoin. Buying lump is good for a newbie and everyone but most people are poor in saving huge amount of money or have a huge amount of money in a hard period like this. Both the poor and the rich can use DCA method as long as you have a cash inflow source but not everyone can buy in lump because it invovles a reasonable amount of money.

[dragonvslinux]

Naturally lump sum will always outperform DCA when done at low prices, or near the lows. Likewise lump sum will always under-perform against DCA when done near the highs.

I'm a fan of the combination of both strategies, specifically using a lump sum amount to DCA over the course of a year or so, ideally after prices have dropped by 50%+.

[spectre71]

But wouldn't that be cooking/manipulating the data? It might be "immature/growing years" in your own opinion, but it's still real and actual data no matter how your opinion says about it.

Not really, things and times change I don't think that early data represents the current situation and how things will be moving forward. When I exclude the early data those projected big numbers go way down what I think would be a more accurate of things to come. While not popular it's better to err on the conservative side.

[Faisal2202]

You have tried your best to explain things, but my dear friend, you failed to do so. Because the data that you entered might have taken some effort from your side, that effort went to waste because this data with specified dates can be gotten from any DCA calculator. You can search on Google for DCA calculators, and on the top 5 you will find some of the best ones. I have tried three or four. The point is that those calculators show data comparisons too.

Like how much profit you could make by doing a lump sum and how much profit you could make by doing DCA. And if we use way too old dates, like 2015, then we will see that DCA has the most benefit, but still, most of the time, the Lump Sum option will show you the highest profit on some DCA calculators.

PS: I think you forgot to mention the total amount of profit that you will make by doing DCA, or I think I missed it out, like you said 12,705.00 at the end but did not mention what it is. So.

[spectre71]

You have tried your best to explain things, but my dear friend, you failed to do so. Because the data that you entered might have taken some effort from your side, that effort went to waste because this data with specified dates can be gotten from any DCA calculator. You can search on Google for DCA calculators, and on the top 5 you will find some of the best ones. I have tried three or four. The point is that those calculators show data comparisons too.

Like how much profit you could make by doing a lump sum and how much profit you could make by doing DCA. And if we use way too old dates, like 2015, then we will see that DCA has the most benefit, but still, most of the time, the Lump Sum option will show you the highest profit on some DCA calculators.

PS: I think you forgot to mention the total amount of profit that you will make by doing DCA, or I think I missed it out, like you said 12,705.00 at the end but did not mention what it is. So.

Yeah I know there are DCA cals, but Excel import the data automagically along with other data that I have on hand.

Well, the 12,705.00 would be net, minus the 3200 so 9505 profit. That was kind of a lucky number to hit, no one could have "predicted" it.  Man I really don't want to go too far back in time, I just don't feel it represents the now and the future. Those  huge **X days are gone for BTC. But good money to be made.

[nelson4lov]

~Snipped
      
   

This data alone is not enough to actually make that comparison but it's a good start. The outcomes you included for both lump and DCA is dependent on a number of factors. For instance, you put thar lump amount at a time when bitcoin was at one of its lowest prices and then some of your DCA were done at times when the price of bitcoin was relatively higher vs lump entry price. So the value is definitely to be reduced since price has dropped since then.

If you DCA more strategically (ie only when price has fallen significantly), then the results for DCA would've been much more better.

[stompix]

Lump some purchase at the first of the month from Jan 1, 2019 to August 1 2023, 56 weeks hence $5600 dollars.
   

Months not weeks!
There are calculators that also simulate these more precisely and easier to change dates than having to run through your excel sheets
https://www.bitcoindollarcostaverage.com/

I'm also thinking of omitting 2018 and 2019, those were immature growing years, I don't think they are indicative how things are going forward really. redux coming when I some time

Why not omit 2020 then also? Because as you see, it was a bad choice to start DCA in 2021.
Omitting years would make DCA no longer DCA but gambling when to buy based on your guts.

From your data, it is clear that lump sum investments outperformed DCA's strategy. 

For that specific date as a start and for this specific data as a conclusion!
Move a few months around and it might be completely different, DCA looked bad for all previous years back in January.

[franky1]

just taking the latest numbers of the 32week DCA example a few posts ago..
heres the numbers i got

2021         
Jan   $29,374.15   100   0.00340435
Feb   $33,573.18   100   0.00297857
Mar   $49,631.24   100   0.00201486
Apr   $59,095.81   100   0.00169217
May   $57,828.05   100   0.00172926
Jun   $36,684.93   100   0.00272591
Jul   $33,572.12   100   0.00297866
Aug   $39,974.89   100   0.00250157
Sep   $48,847.03   100   0.00204721
Oct   $48,116.94   100   0.00207827
Nov   $61,004.41   100   0.00163923
Dec   $57,229.83   100   0.00174734
2022         
Jan   $47,686.81   100   0.00209702
Feb   $38,743.27   100   0.00258109
Mar   $44,354.64   100   0.00225456
Apr   $46,281.64   100   0.00216068
May   $38,469.09   100   0.00259949
Jun   $29,799.08   100   0.00335581
Jul   $19,269.37   100   0.00518958
Aug   $23,314.20   100   0.00428923
Sep   $20,127.14   100   0.00496842
Oct   $19,312.10   100   0.00517810
Nov   $20,485.27   100   0.00488156
Dec   $16,967.13   100   0.00589375
2023         
Jan   $16,625.08   100   0.00601501
Feb   $23,723.77   100   0.00421518
Mar   $23,646.55   100   0.00422895
Apr   $28,411.04   100   0.00351976
May   $28,091.57   100   0.00355979
Jun   $26,819.97   100   0.00372856
Jul   $30,590.08   100   0.00326903
Aug   $29,675.73   100   0.00336976
            total   0.10489273

which if sold in september 1st
Sep   $25,811.00      0.10489273 = $2810.63
so $3200 input $2810 output = $390 loss

lump
Jan   $29,374.15   1066.66   0.03631288
Jan   $47,686.81   1066.66   0.02236803
Jan   $16,625.08   1066.66   0.06415969
               total   0.12284060

which if sold in september 1st
Sep   $25,811.00      0.12284060 = $3170.64
so $3200 input $3170 output = $29.36 loss

[spectre71]

just taking the latest numbers of the 32week DCA example a few posts ago..
heres the numbers i got

2021         
Jan   $29,374.15   100   0.00340435
Feb   $33,573.18   100   0.00297857
Mar   $49,631.24   100   0.00201486
Apr   $59,095.81   100   0.00169217
May   $57,828.05   100   0.00172926
Jun   $36,684.93   100   0.00272591
Jul   $33,572.12   100   0.00297866
Aug   $39,974.89   100   0.00250157
Sep   $48,847.03   100   0.00204721
Oct   $48,116.94   100   0.00207827
Nov   $61,004.41   100   0.00163923
Dec   $57,229.83   100   0.00174734
2022         
Jan   $47,686.81   100   0.00209702
Feb   $38,743.27   100   0.00258109
Mar   $44,354.64   100   0.00225456
Apr   $46,281.64   100   0.00216068
May   $38,469.09   100   0.00259949
Jun   $29,799.08   100   0.00335581
Jul   $19,269.37   100   0.00518958
Aug   $23,314.20   100   0.00428923
Sep   $20,127.14   100   0.00496842
Oct   $19,312.10   100   0.00517810
Nov   $20,485.27   100   0.00488156
Dec   $16,967.13   100   0.00589375
2023         
Jan   $16,625.08   100   0.00601501
Feb   $23,723.77   100   0.00421518
Mar   $23,646.55   100   0.00422895
Apr   $28,411.04   100   0.00351976
May   $28,091.57   100   0.00355979
Jun   $26,819.97   100   0.00372856
Jul   $30,590.08   100   0.00326903
Aug   $29,675.73   100   0.00336976
            total   0.10489273

which if sold in september 1st
Sep   $25,811.00      0.10489273 = $2810.63
so $3200 input $2810 output = $390 loss

lump
Jan   $29,374.15   1066.66   0.03631288
Jan   $47,686.81   1066.66   0.02236803
Jan   $16,625.08   1066.66   0.06415969
               total   0.12284060

which if sold in september 1st
Sep   $25,811.00      0.12284060 = $3170.64
so $3200 input $3170 output = $29.36 loss

Good stuff brother, we are ending up in the same place, there is no magic combo

I've been putting together "policy" trading on this data and ended up 39% at 32 weeks. My just here is trying to get out of emotional trading and strait up number. Past performance dictates future performance.

[icalical]

Both strategy can never be compared as apple to apple, it's very different strategy with different purpose, that applicable for different people. Sure, you might get far more profit with Lump, but you need a do a deep flawless research and you need to enter the market at the very right moment, an off timing would have huge impact, especially with a very volatile market like Bitcoin.

[pawanjain]

As far as lump sum investment is considered then I think it really depends on at what point of time you are investing.
The entry point really matters in this case because it decides the returns for our investment.
DCA is a better strategy because it gives us a good average price and we don't have to worry about what price we get in.
Arranging money for DCA is more convenient since the money is invested in regular time periods instead of investing a big amount in one go.

[spectre71]

I did another were I  would sell at above 10% (50% into the buy pool and 50% profit) back down to 3200 and would buy back at 33% of the sell amount per month below 5%. It came out 39% profit. It pays to manage your money with a formula and not emotion.