patrick.net

It's impossible to lose in any retirement/pension vehicles!
Hope no one totals your car.

Interesting question. I downloaded 8 years of historical data for SPY from
http://www.nasdaq.com/symbol/spy/historical & http://www.nasdaq.com/symbol/spy/dividend-history
and then wrote a quick program to simulate how I would have performed over the past 10
years if I purchased in various parts of the year.

The sim lets me specify which months to buy in, using exactly 1 purchase per month. I decided
to compute the average stock price on a per month basis. Stock purschases were
made using this average price, and they were executed on the 15th of the month if a purchase was
made that month.

I also assume enrollment in dividend reinvestment, and purchase more shares on the divident payment date. If the
data is missing the payment date, I pick a date about 2 weeks after the EX date, and purchase the DRIP shares
at that day's price.

You set a yearly contribution, and it splits that equally into purchases amoung the months you specified.

The sim works by just looping through all days from start to end, at each day it checks if it should buy stock
or collect a dividend, and prints out event messages along the way. It also prints how many shares you have
at the end, and higher is better of course.

I ran the sim using $5500 per year, and here's the results vs which months I bought in:

months, num shares at the end
1,2,3 410.86
4,5,6 392.32
7,8,9 391.06
10,11,12 390.83
1 412.73

As you can see, the sim says it's better to buy at the start of the year. Although, that might just be due to collecting a few more dividends the first year and letting that compound over the years.

I attached the verbose output if anyone's interested.

c1561490 says

Interesting question. I downloaded 8 years of historical data for SPY from

http://www.nasdaq.com/symbol/spy/historical & http://www.nasdaq.com/symbol/spy/dividend-history

and then wrote a quick program to simulate how I would have performed over the past 10

years if I purchased in various parts of the year.

That's awesome! I don't know if I'll change anything, but it's cool to know!

Is the bottom one, simply "all shares bought in January"?

Ironman says

The bottom line, if the money isn't invested, it's not working for you. Just put it in, because you'll never time it right.

No question. Not to dwell too much, but that's not the issue for me. I already max out on it in the first half, I just wonder if I should change that to equal 12ths all year, or move to the 2nd half kind of thing.

But, on a related note, I have other dollars I need to get growin', maybe in Betterment or some shit.

Thanks for the insights!

CL says

Is the bottom one, simply "all shares bought in January"?

yup.

CL says

I've maxed out since back when I was poor, and continue to do so. As time progressed, what used to be a same sized contribution each month has turned into getting all of it in in the first half of the year.

Is there employer match? Does it stop when your contributions stop? You need to make sure you don't leave any of these money on the table when you max out early.