DCA Experiment as of August 4

The objective of this experiment is to demonstrate the power of dollar cost averaging.  I believe that it is the best investment strategy for the average investor.  If you are willing to learn technical analysis, you may outperform dollar cost averaging.  However, technical analysis can take a significant amount of time to master.

So, how are we doing? CEF is back on the positive side with a monthly gain of 2.8% vs. 0.66% for the S&P 500.  GDX and the S&P 500 were practically even for the month. CEF & GDX are both still outperforming the S&P 500 year to date.

Table 1. CEF vs. S&P 500

  CEF S&P 500 CEF S&P 500
  Closing Price Closing Price Mon. Return Mon. Return
1/4/07        
12/4/06        
11/6/06        
10/4/06        
9/4/06        
8/4/06 9.17 1279.36 2.80% 0.66%
7/5/06 8.92 1270.91 -2.09% 0.44%
6/5/06 9.11 1265.29 -9.80% -3.58%
5/4/06 10.10 1312.25 24.23% 0.25%
4/4/06 8.13 1309.04 3.57% 2.41%
3/6/06 7.85 1278.26 2.08% 1.05%
2/6/06 7.69 1265.02 8.31% -0.66%
1/4/06 7.10 1273.46    

Note: $1000 invested each month in CEF (total $7000) is worth $7722.62 (10.32%).
Note: $1000 invested each month in S&P 500 (total $7000) is worth $6986.86 (-0.19%).

Table 2. GDX vs. S&P 500

  GDX S&P 500 GDX S&P 500
  Closing Price Closing Price Mon. Return Mon. Return
1/4/07        
12/4/06        
11/6/06        
10/4/06        
9/4/06        
8/4/06 39.59 1279.36 0.56% 0.66%
7/5/06 39.37 1270.91 3.25% 0.44%
6/5/06 38.13 1265.29    

Note: $1000 invested each month in GDX (total $2000) is worth $2043.88 (2.19%).
Note: $1000 invested each month in S&P 500 (total $2000) is worth $2017.77 (0.89%).
Data starts on 6/5 since GDX was launched on 5/25/06

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