Strategic investment simulation: Dollar cost averaging & reinvestment analysis across market regimes

Abstract

This study assesses the effectiveness of a self-developed simulator integrated with a systematic dollar-cost averaging (DCA) strategy in stock investment. It monitors investments across four distinct five-year periods: the Global Financial Crisis, the post-crisis recovery, the COVID-19 pandemic, and the recent surge in artificial intelligence. The research highlights three key insights. First, systematic DCA can convert market volatility into an advantage by encouraging regular investment. Second, selecting the right assets is more crucial than timing the market. Third, a balanced portfolio that combines growth assets with stable, high-quality holdings tends to perform well across different economic conditions. These findings provide practical guidance for investors looking for disciplined, evidence-based strategies in complex markets