ETF / Stocks / Crypto - DCA Strategy v1

2020년 9월 16일

Simple "benchmark" strategy for ETFs, Stocks and Crypto! Super-easy to implement for beginners, a DCA (dollar-cost-averaging) strategy means that you buy a fixed amount of an ETF / Stock / Crypto every several months. For instance, to DCA the S&P 500 (SPY), you could purchase $10,000 USD every 12 months, irrespective of the market price. Assuming the macro-economic conditions of the underlying country remain favourable, DCA strategies will result in capital gains over a period of many years, e.g. 10 years. DCA is the safest strategy that beginners can employ to make money in the markets, and all other types of strategies should be "benchmarked" against DCA; if your strategy cannot outperform DCA, then your strategy is useless.

Recommended Chart Settings:

Asset Class: ETF / Stocks / Crypto
Time Frame: H1 (Hourly) / D1 (Daily) / W1 (Weekly) / M1 (Monthly)

Necessary ETF Macro Conditions:

1. Country must have healthy demographics, good ratio of young > old
2. Country population must be increasing
3. Country must be experiencing price-inflation

Necessary Stock Conditions:

1. Growing revenue
2. Growing net income
3. Consistent net margins
4. Higher gross/net profit margin compared to its peers in the industry
5. Growing share holders equity
6. Current ratios > 1
7. Debt to equity ratio (compare to peers)
8. Debt servicing ratio < 30%
9. Wide economic moat
10. Products and services used daily, and will stay relevant for at least 1 decade

Necessary Crypto Conditions:

1. Honest founders
2. Competent technical co-founders
3. Fair or non-existent pre-mine
4. Solid marketing and PR
5. Legitimate use-cases / adoption

Default Robot Settings:

Contribution (USD): $10,000
Frequency (Months): 12

*Robot buys $10,000 worth of ETF, Stock, Crypto, regardless of the market price, every 12 months since its founding time.*
*Equity curve can be seen from the bottom panel*

Risk Warning:

This strategy is low-risk, however it assumes you have a long time horizon of at least 5 to 10 years. The longer your holding-period, the better your returns. The only thing the user has to keep-in-mind are the macro-economic conditions as stated above. If unsure, please stick to ETFs rather than buying individual stocks or cryptocurrencies.