Our Investment Simulator Methodology
How we calculate past performance for Lump Sum and DCA simulations using reliable market data, transparent rules, and reproducible math.
📊 Data Sources
We consolidate daily historical prices from reputable providers. Corporate actions and adjusted series are included where available.
| Provider | Asset Class | Notes |
|---|---|---|
| Yahoo Finance | Stocks / ETFs | Adjusted Close includes splits/dividends where provided. |
| CoinGecko | Crypto | Spot prices aggregated from multiple exchanges. |
| Google Sheets | Internal Hub | ETL staging & validations before simulation. |
Currency defaults to USD; FX conversions may apply for other currencies.
📈 ROI & DCA Calculation
Lump Sum
Invest all capital on the start date; value evolves with price series until the end date.
ROI = (FinalValue - InitialInvestment) / InitialInvestment
CAGR = (FinalValue / InitialInvestment)^(1/years) - 1Dollar‑Cost Averaging (DCA)
Contribute a fixed amount at a fixed cadence (e.g., monthly).
For each contribution date t:
units_t = contribution / price_t
TotalUnits = Σ units_t
FinalValue = TotalUnits × price_end
ROI = (FinalValue - TotalContributions) / TotalContributionsAdvanced metrics
Max Drawdown largest peak‑to‑trough % loss over the path.
Volatility standard deviation of (monthly) returns.
Sharpe / Sortino risk‑adjusted return metrics (premium features).
⚠️ Assumptions & Limitations
- No fees, taxes, or slippage unless configured.
- Daily close/adjusted‑close data; intraday effects ignored.
- Dividends included only when using adjusted series.
- Results are educational; past performance ≠ future returns.
Opportunity Cost
Long DCA schedules can lag in persistent uptrends; lump sum can hurt if a drawdown hits early.
Reproducibility
All outputs can be replicated using the same dates, cadence, and sources in our tools.
🧪 Data Quality & Reproducibility
- We validate symbol mappings, missing days, and split/dividend events.
- Fallback logic can switch to alternate providers on transient outages.
- We timestamp simulations and record parameters for auditability.
See also: Investment Simulator · DCA Calculator · Premium features
❓ FAQ
How are returns calculated in the simulator?
We use daily close/adjusted‑close prices. Lump sum invests all capital on day one; DCA spreads equal contributions at a fixed cadence. Unless configured, fees/taxes aren’t included.
Where does the data come from?
From reputable providers like Yahoo Finance (stocks/ETFs) and CoinGecko (crypto). Corporate actions are reflected in adjusted series where available.
Does the simulator include dividends?
Yes when adjusted series are used (total return proxy). If only price return is available, we disclose it in the tool.
How accurate is it?
Educationally accurate for back‑of‑the‑envelope planning. Exact outcomes vary with data quality, costs, tax status, and execution.
Run Your Own Scenario
Use the free tools to test dates, cadence, fees, and more.