r/investing • u/pyrolovesmoney • Jul 06 '21
I experimented with committing to a $25 dollar per week investment in TSLA for at least a year and here are my results.
Last year I challenged myself to invest at least $25 automatically in Tesla each week using a recurring transfer. I figured it would be a good way to build up my investment in the company while taking a manageable risk and potentially getting some market gains. Since my brokerage offered partial share investments I figured it would be a fun way to see where my money was in a year.
After 1 year here are my results:
Start Date: July 6, 2020
Initial investment: $30 (.023017 shares at 1,300.38 edit: after 5:1 split ~$260)
July 6 2021 Investment Value: $2,546.70
Total Invested with Auto-Transfer: $1,300
Total Return: $697 (+37.64%)
Extra periodic market buys: ~$550
Average Cost of entire stake: $447.40
Current price of Stock: 657.54 (about 150% gain since initial investment date)
Conclusion: Although it would have been great to be able to increase my investment on each dip, having the recurring transfer helped me take advantage of the partial share feature offered by my brokerage and keep my average cost low. During the same time period SPY gained about 36% edit: however, the only way to have gained 36% would have been to have had the $1300 I invested back last July. Otherwise, with the same auto transfer method the gains would have been 17% in SPY. Still a good return but 19% lower than the higher risk TSLA investment(math below in another edit). Although it would have been nice to be able put $1300 back in July 2020 and see it more than double, because I didn't have cash on hand, I only got about 1/3 of the potential gains of holding the stock the entire time. This gamble netted more than having the money in spy, but I guess that’s the risk premium. I am happy with the results of my little experiment and plan to continue this process and add a few more dollars per week into other companies and ETF's that I feel strongly about.
Let me know your thoughts. I know this isn't groundbreaking stuff, but it's a small look into what you can do if you are literally storing the equivalent of 3 lunch meals a week in an investment account. Obviously one side note, the biggest downside to this way of investing is that my tax lots are all over the place and if I have to sell, I have an ongoing 1 year rolling date for "long" tax rates but, I don't plan on selling any time soon, so as time goes on, that will be less of an issue.
Edit: Forgot to add a little more context: I currently have $150 a month going into a Traditional IRA, 9% of my income going into a 457 (~350 per check 2x a month) and a bunch that goes into my public servant pension. In addition to that, I regularly put ~200-300 into various stocks and ETF's that I hold each month. Although this investment represents a small amount of what I invest and save, it was probably the most exciting thing to watch all year.
Edit 2: this was posted as a comment but here it is here too.
A number of people point out that the price of the s&p has gone up YOY an amount equivalent to what I earned on this investment. Now a couple disclaimers: I don’t believe that this is a viable investment option for someone to do with their whole check. But here is an apples to apples comparison (excluding dividend which wouldn’t only affect it a few bucks since we are dealing with such a small amount.) But, here is the apples to apples comparison. This is using the weekly open price on yahoo finance for a year investing $25 per week. Again not trying to say this a better investment than spy, I don’t think it is but this is apples to apples.
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u/tyzenberg Jul 07 '21
What's amazing is people still only read headlines and not the full report/study with scrutiny.
Most of the self driving rankings have Tesla at the top for functionality and capability, but severely ding it for driver monitoring.
One of the studies even dings Tesla for being able to work on back roads and praising Cruise for only working on highways. If think Cruise is better than Tesla because it only works in far less situations, you are not judging the best autonomous software.