28.1 Dollar cost averaging example

Code

## Fake price data for a stock
x = 1:52
df = data.frame(week = x, 
                price = 10 + x/100 - x %% 2/50, 
                shares = NA)
plot(df$week, 
     df$price, 
     type='l')

Suppose you have $5,200 to invest. If the S&P500 goes up more often than it goes down in a year, then should you buy up front at the start of the year, or dollar cost average?

Code

n = 5200

## Buy all up front
shares = n/df$price[1]
final.value = shares*df$price[52]
final.value

## DCF, $100 per week
df$shares = 100/df$price
sum(df$shares)*df$price[52]

[1] 5475.876
[1] 5335.527

The linear with oscillation increase is too simple. Should use actual stock prices.

Functions from dplyr

• filter, select, mutate, rename, summarize, arrange, group_by, *_join, pivot_longer, pivot_wider, ifelse, case_when
• String multiple commands together with pipe operator

ggplot and related functions

• geom_’s: geom_point, geom_jitter, geom_smooth, geom_line, geom_bar, geom_histogram, geom_tile, geom_segment
• facet_wrap, facet_grid

Note to self: see 425-625/notes/Reshaping and aggregating data for base R equivalents and comparisons.