SACIN/SACOUT - Software to improve your dollar cost averaging results whether you're buying or selling


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Sample Results

These simple examples demonstrate that mathematically-based SACIN and SACOUT always produce results in the investor's favor.

Dollar cost averaging (DCA) and the SACIN® and SACOUT® methods results are all mathematical and are not dependant on the order in which the periodic prices occur. Also, they are the same whether a single large transaction or several equivalent smaller transactions are made at a certain price, p. Consequently the following simple examples adequately demonstrate the benefits of the SACIN® and SACOUT® methods using just three periods with nominal dollar amount A=$5000, and base price Pb=$10.

BUYING:

State of the Art
SACIN® Method
DCA, SACIN® Method Ki=0
Ki=0.5
Period
Price, P
Shares
Dollars
Shares
Dollars
1
10
500.00
5,000.00
500.00
5,000.00
2
11
454.55
5,000.00
416.67
4,583.33
3
9
555.56
5,000.00
625.00
5,625.00
Avg=$10
 
 
Totals:
1,510.10
15,000.00
1,541.67
15,208.33
Average cost per share:
$9.93
$9.86

SELLING:

The state of the art practice of selling an equal dollar amount per period is DCA to benefit the buyer as you are selling for $9.93/share as seen above. Also, if you use a better state of the art technique of selling equal shares per period you will sell for the average period price of $10 as seen above. The improved performance of the SACOUT® method is shown below:

SACOUT® Method
SACOUT® Method
Ko=2
Ko=1.5
Period
Price, P
Shares
Dollars
Shares
Dollars
1
10
500.00
5,000.00
500.00
5,000.00
2
11
555.56
6,111.16
625.00
6,875.00
3
9
454.54
4,090.86
416.67
3,750.03
Avg=$10
 
 
Totals:
1,510.10
15,202.02
1,541.67
15,625.03
Average cost per share:
$10.07
$10.14

We have talked of using the SACIN® and SACOUT® methods to purchase shares but units would be a better term. They are not limited to shares but could be used to purchase commodities of any type. Periodic purchases or sales do not have to be on a calendar basis. Rather than making a single large transaction, these methods could be used to make several smaller transactions at fixed periods or times selected on any basis, even when you try to time the market.

It looks like we are getting something for nothing and we are. The question is who is losing? It's not the fund manager any more than they lose with dollar cost averaging. Just as with any gain, it's the seller for the SACIN® method and the buyer for the SACOUT® method, but that's not new. Finally, what's the environmental impact of using these techniques? Small as it is, it is a stabilizing influence on the market. They increase sales and decrease purchases when the price goes up, which tend to reduce the price increase; and increase purchases and decrease sales when the price goes down, which tend to reduce the decrease.

Sacco Company, Inc.
323 Bittersweet Circle
Williston, VT 05495
802-288-9176
E-mail:

© Copyright 2007, Sacco Company, Inc. All Rights Reserved.
The technology underlying SACIN® and SACOUT® is protected under U.S. Patent #7,003,483.

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