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How ‘Dollar Cost Averaging’ can help us succeed at FPL

Ex-FPL winner Simon March: How to avoid getting carried away with your GW1 picks

There’s a concept in investing called ‘Dollar Cost Averaging’ (DCA) which describes the practice of investing in a stock periodically (e.g. a bit every month) as opposed to going in with one big lump sum. Part of its appeal is practical, we don’t always have access to all the money we might want to invest at one time but it is also popular because of how it can mitigate investment risk.

Since a big part of Fantasy Premier League (FPL) is managing risk effectively, this article will consider whether the principles of DCA might have value for FPL managers looking to improve their performance.

How Does Dollar Cost Averaging Work?

As mentioned, in its most basic form DCA simply describes a regulated method of spreading out a finite resource (money to invest) over time. However, because stock prices fluctuate over time, DCA also helps investors avoid putting all their money on a stock at its peak, only to watch it then decline.

For example, as opposed to buying 150 shares in one lump at £10 per share, an investor might buy 50 shares at £10 one month, 50 shares at £8 the next month and 50 shares at £11 the month after that. The net effect is that, via the second (DCA) method, the 150 shares cost £1,450 in total rather than the £1,500 cost of the lump-sum method. 

Of course, as the above example shows, share prices can go up as well as down so using DCA always runs the risk that it could end up becoming more expensive than a lump sum strategy, but risk management usually involves some trade-off with efficiency so that’s something most proponents will accept.

In FPL, our most significant finite resources are our player budget, the ever-declining number of Gameweeks, our transfers and the points we accumulate while playing. For this article, I’m going to focus on the latter two resources, as I think these are where DCA principles might be the most influential.

Transfers

One of the common strategic questions when it comes to FPL management is when in the Gameweek to use our free transfers; should we use them early in the Gameweek and maximise our chances of getting a player at their lowest price, or should we wait until the end of the Gameweek so we have the most team news available, even if that means we’ll have to pay more for the player (assuming we can even still afford him at that point)?

The reason this dilemma has no obvious answer is not just that both alternatives have their pros and cons but because we invariably seem to get it wrong; we make transfers early only to see the player get injured or we leave it late and pay over the odds unnecessarily.

A DCA approach would recommend choosing one of these strategies and sticking to it. In other words, you either make your transfers early or you make them late, but you never switch between the two strategies.

This would inevitably mean that you would experience some Gameweeks where it pays off and some Gameweeks where it doesn’t but it also means that, since you won’t be swapping between the strategies, you will definitely experience the full benefits of whichever strategy you choose and you will definitely not experience the worst possible outcome of both strategies – something which would be unfortunate but, also, very possible if you keep switching.

I’ll put it another way; if you swap between making early transfers and making late transfers, there’s a chance you will time it right every week but there is also a chance you will time it wrong every week; the FPL equivalent of buying a stock at its peak. Therefore, you could argue, this DCA-inspired approach is preferable because it averages out these eventualities, avoiding the worst-case scenario.

Captaincy

Another fairly intuitive application of the DCA method would be towards captaincy choices. In the first nine Gameweeks of this season, I have chosen four different captains and this approach seems fairly typical for FPL managers; we tend to hand the armband to whoever we believe has the biggest upside that week or, sometimes, a player so heavily owned that to not captain them seems to be a bigger risk than it is worth.

The DCA approach, on the other hand, would involve picking one captain and sticking with them, perhaps even for the whole season. This is currently a hot topic of debate amongst the FPL community, with many pledging to permanently captain Mohamed Salah (£12.9m) due to his phenomenal season. While it is very unlikely that you would ever maximise your potential captaincy scores via this method over a season, it does mean that you’d reduce the possibility of the worst-case scenario; captaining the wrong player each week. This is the captaincy equivalent of ‘buying at the peak’.

You could consider this a defensive approach to captaincy but it’s also a method that at least one former FPL winner (not me) has applied and, on this basis, obviously has the potential to succeed – provided that you pick the right player in the first place.

Points and Hits

Finally, points are a resource that we accrue throughout the season but we have the option of spending points in return for additional transfers in the form of four-point hits. The problem with these is that they can mount up over time and, while they may pay off, the risk that they don’t pay off increases with every hit you take.

A DCA approach to taking points hits would involve some form of regulated metering of them over time. For example; you could decide to limit yourself to just one -4 each calendar month and thus a maximum of 10 over a season. This method would effectively rule out a -8 or -12 hit and, while it would also, therefore, rule out the possibility of a -8 or a -12 hit paying off, it would also rule out the possibility that it would backfire horribly (you can decide for yourself which you think is more likely).

It would also help prevent you from falling into the dreaded ‘hit spiral’ where your points spending gets completely out of hand and you end up throwing good points after bad to try and dig yourself out of an FPL hole.

If you wanted to, you could adapt this approach so you can accrue ‘unused hits’ from month to month, leaving open the possibility, say, of taking a -8 in February if you took no hits in January and so on. You’d have to keep track of what you’re doing but I don’t see that this would fundamentally undermine the principle of the DCA approach.

Summary

Dollar Cost Averaging is a system of staggering your investments in a way that avoids the worst possible outcome of buying all your stock at its peak. By definition, however, it can never deliver the best possible outcome either, it is, in this sense, a fundamentally conservative strategy.

The way that the DCA method manages resources has applications to FPL, including when to make transfers, how to choose captains and whether to spend points. In none of these instances is it the ideal method for maximising your points return or ‘payoff’ but not every potential payoff in FPL needs to or even benefits from being maximised.

There are certain aspects, such as those discussed here, where you just want to avoid getting it wrong too often so you can find your advantages via other avenues (e.g. squad selection, differentials, squad value maximisation etc) so, while you probably wouldn’t want to build your strategy entirely on DCA, it could certainly have a useful part to play in it.

Having said that, it would be a mistake to assume that the Dollar Cost Averaging method would necessarily produce average results. When to make transfers, for example, is a strategic decision with the best approach often varying depending on the dynamics of the particular season. Similarly, the practice of picking a single captain will vary in efficacy depending on who you pick and how reliable a performer they are. Make a good selection (for example, Salah so far this season) and your captain points return could well exceed the average of those who switch the armband around.

Ultimately, managing risk doesn’t mean achieving no risk and, while we often talk about ‘mavericks’ and ‘dullards’ in FPL, the ideal strategy usually falls somewhere in between, with managers knowing how and when to take a punt and how and when to play it safe. DCA could be a useful approach for handling the latter part in a consistent and disciplined way.


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157 Comments Post a Comment
  1. Dammit_182
      1 month, 1 day ago

      RE the article - I like taking elements from the portfolio management works and applying them to FPL BUT this article on pound cost averaging seems more like a ‘passive’ (or casual) management style which frankly shouldn’t be the approach an ‘engaged’ manager takes. We should be ‘active’ and make calls like ‘there are CL games this week and I’m not going to be priced out, perhaps I had better not bring Kaku in until he has played’ or ‘my player drops, this one rises tonight and there are no midweek games - let’s go early.’

      Taking the call to go early or late each week, adding a -4 hit maximum mandate and perma captain seems hugely passive. Like passive investing, it can work well and often better than active management at reduced effort/cost. But for most of us on here it’s too simple and likely the wrong ‘style’ to adopt even if it means we occasionally bring in the wrong Chelsea midfielder based on sound reasoning and miss out on the salah mega haul….

      1. Sharkytect
        • Fantasy Football Scout Member
        • 7 Years
        1 month, 1 day ago

        Agreed

      2. FOO FIGHTER
        • 2 Years
        1 month, 1 day ago

        I believe the main outcome will be based on playing your own game and not following the herd.

        1. FOO FIGHTER
          • 2 Years
          1 month, 1 day ago

          Saying that, just about everyone owns Salah so not capping him for the GW10 is a death trap.

          The rest of your setup will either result in a green or red arrow.

          1. Dammit_182
              1 month, 1 day ago

              Yea, that’s it. There are lots of similarities (though not an exact cross over) with things like 80% of your playing squad being ‘medium to long term picks’ perhaps 20% ‘shorter term opportunities’ and I feel you can argue that the ‘assets’ can be seen loosely as different assets classes (defenders, mids, strikers/bonds/property/equites) but the similarities are tenuous at best….

        2. Ron_Swanson
          • 11 Years
          1 month, 1 day ago

          Agreed and well done for calling it pound cost averaging. No idea why they went for dollar in the article.

          1. FOO FIGHTER
            • 2 Years
            1 month, 1 day ago

            There was also the article of checklists. Not of any use to me.

          2. Dammit_182
              1 month, 1 day ago

              I can only imagine the author read an American article and thought a largely UK audience would prefer $….

            • Donkey_Sanctuary
              • Fantasy Football Scout Member
              • 9 Years
              1 month, 1 day ago

              Because Dollar Cost Averaging is a widely used and accepted term. The name doesn't change to pound cost averaging or Euro cost averaging based on the country where the concept is being discussed!

          3. Tarby
            • Fantasy Football Scout Member
            • 2 Years
            1 month, 17 hours ago

            Yeah I agree it's too far for FPL managers who come in a site on FPL so are clearly very active indeed!

            The overall premise is much softer in reality. Like I may well perma-captain Mo now, but originally my plan was stick to 2 premium assets and captain the one with the better fixture each week. So not spraying it around the team randomly, but having a plan in place.
            I try and avoid hits, but sometimes with injuries or clear opportunities I'll make exceptions. Saying take a 1 point hit per GW on average would be just silly and perhaps encourage recklessness if I didn't take a hit for 7 or 8 GWs. Seems an odd approach to consider.

            I think the writer just felt it'd come across as an intelligent piece as he probably just read about Dollar Cost Averaging

          4. polroger
            • Fantasy Football Scout Member
            • 10 Years
            29 days, 16 hours ago

            This was simply an excellent article. I have rules on no hits this season combined with a permanent captain's tie on Salah. This combined with always waiting until Friday with transfers. The sum of these rules has helped me to do very good decisions in retrospect. A permanent captain can also be attacking! I had the cap on Salah agenst City and made a massive rank boost!

            1. Dammit_182
                29 days, 16 hours ago

                Thanks for the comment - lots of people out their week 1 squad & captain vs the Where they are now and largely down to perma captaining salah would have been better off. Nothing against having ‘rules’ either and I went Kaku capt when salah got his city haul so we’ll done. My point is that it’s not really £ cost averaging but more a passive vs active management style and there will be opportunities missed by always doing transfers on Fridays etc.

                I’m sub 1M rank right now so could probably do with a few rules and not knee jerking my wild card in after a night out.

                Good Luck for the rest of the season

          5. baines is god
            • 9 Years
            1 month, 1 day ago

            Raphina and Greenwood to KDB and Foden -4?

            1. internal error
              • Fantasy Football Scout Member
              • 8 Years
              1 month, 1 day ago

              do Greenwood to Foden

            2. dunas_dog
              • Fantasy Football Scout Member
              • 6 Years
              1 month, 1 day ago

              Would rather Son over KDB

            3. EugeMurts
              • Fantasy Football Scout Member
              1 month, 1 day ago

              KDB not firing yet this season

          6. DAZZ
            • Fantasy Football Scout Member
            • 7 Years
            1 month, 1 day ago

            If Vardy is ruled out, would you do Vardy > Kane for free?

            1. Esalman
              • 12 Years
              1 month, 1 day ago

              Nah Kane is simply not at last year's level. Probably affected by the transfer drama and I think it'll affect him for the rest of the season.

            2. FOO FIGHTER
              • 2 Years
              1 month, 1 day ago

              I got in Son for GW9 and considering getting rid.

              Spurs not playing the football suited to Son or Kane.

              Son the only shining light but cheaper players available which will match him.

              1. Andy_Social
                • Fantasy Football Scout Member
                • 9 Years
                1 month, 1 day ago

                Gets a free haul GW10 though. Get rid after.

          7. GW10 Fixture and clean sheet odds
            G-Whizz
            • Fantasy Football Scout Member
            • Has Moderation Rights
            • 4 Years
            1 month, 1 day ago

            GW10 fixture odds can be found here:
            http://prntscr.com/1xdcu8n
            (Provided by Betbrain)

            GW9 clean sheet results:
            CHE: 62% ✅
            MCI: 48% ❌
            EVE: 44% ❌
            SOU: 37% ❌
            ARS: 35% ❌
            CRY: 35% ❌
            LEE: 30% ❌
            BRE: 29% ❌
            LEI: 29% ❌
            WHU: 29% ✅
            LIV: 26% ✅
            WOL: 26% ❌
            TOT: 25% ❌
            BUR: 23% ❌
            NEW: 22% ❌
            MNU: 21% ❌
            AVL: 20% ❌
            WAT: 18% ❌
            BHA: 15% ❌
            NOR: 9% ❌

            GW10 clean sheet odds:
            MCI: 54%
            LIV: 51%
            CHE: 49%
            WOL: 37%
            BRE: 31%
            BUR: 30%
            LEE: 30%
            SOU: 30%
            EVE: 28%
            LEI: 27%
            MNU: 27%
            WHU: 27%
            AVL: 26%
            ARS: 25%
            TOT: 24%
            WAT: 24%
            NOR: 21%
            NEW: 14%
            BHA: 10%
            CRY: 8%
            (Provided by Betbrain)

            Clean sheet totals:
            Chelsea: 6 (+1)
            Liverpool: 6 (+1)
            Manchester City: 6
            Brighton: 4
            Arsenal: 3
            Aston Villa: 3
            Brentford: 3
            Southampton: 3
            Tottenham: 3
            West Ham: 3 (+1)
            Crystal Palace: 2
            Everton: 2
            Norwich: 2
            Wolves: 2
            Burnley: 1
            Leeds: 1
            Leicester City: 1
            Manchester Utd: 1

            An absolute disaster of a GW for me, lost my H2H fixture with Geoff, out of LMS and a HUGE 300k red arrow! Oh well, I suppose that's expected when you don't captain Salah 😉

            Don't know where I'm going with my team at the moment, might even roll the FT and just hope for the best. Surely it can't be as bad as it was in GW9 can it?

            Whatever your moves this week, hope again your arrows be green, and I'll catch you again next week...

            Have a good'un!!!

            G

            1. Hazz
              • Fantasy Football Scout Member
              • 4 Years
              1 month, 1 day ago

              Cheers G-Whizz. Condolences on the week, but don't worry about LMS... we all drop out eventually!

              1. G-Whizz
                • Fantasy Football Scout Member
                • Has Moderation Rights
                • 4 Years
                1 month, 1 day ago

                Thanks mate, think I've learned which way to go when I have a form over fixture dilemma now 😆

                Still in shock at the Old Trafford scoreline if I'm totally honest, I just didn't see that coming :O

                LMS has never been the luckiest competition for me but guaranteed, I'll be entering again next year 😆

                Hope you had a good GW yourself 😀

                1. Baps hunter
                  • Fantasy Football Scout Member
                  • 4 Years
                  1 month, 1 day ago

                  LMS is a killer for my strategy to have more than one double up / putting the eggs to much fewer baskets than most other managers. Usually bumpy ride or like a roller coaster, but this season has been only downhill so far 😉

              2. Baps hunter
                • Fantasy Football Scout Member
                • 4 Years
                1 month, 1 day ago

                Except the winner 😉

            2. Baps hunter
              • Fantasy Football Scout Member
              • 4 Years
              1 month, 1 day ago

              Thx for the post!

              1. G-Whizz
                • Fantasy Football Scout Member
                • Has Moderation Rights
                • 4 Years
                1 month, 1 day ago

                You're welcome mate 🙂

            3. rainy
              • Fantasy Football Scout Member
              • Has Moderation Rights
              • 6 Years
              1 month, 1 day ago

              Cheers G 🙂

              1. G-Whizz
                • Fantasy Football Scout Member
                • Has Moderation Rights
                • 4 Years
                1 month, 14 hours ago

                You're welcome mate! 🙂

            4. Ian & Zen
              • Fantasy Football Scout Member
              • 5 Years
              29 days, 14 hours ago

              Hi, is it possible to join LMS, if we have the required score each week? If so where can I get the code. I’m always in it but this season I never saw the code. Thanks

          8. Cpthavoc
            • Fantasy Football Scout Member
            • 4 Years
            1 month, 1 day ago

            Does anyone know when the scoutcast will be ?

            1. Eh, just one more thing ...
              • Fantasy Football Scout Member
              • 9 Years
              1 month, 1 day ago

              8pm tonight I believe

          9. Esalman
            • 12 Years
            1 month, 1 day ago

            Which live score website do you use, apart from this site and livescore.com? The new interface at LiveScore is even slower than before on mobile for me.

            1. AC/DC AFC
              • 6 Years
              1 month, 1 day ago

              SofaScore.com is great.

              You can play a little prediction game and see how you do too.

          10. Cpthavoc
            • Fantasy Football Scout Member
            • 4 Years
            1 month, 1 day ago

            Great thanks

          11. thirddimension
            • Fantasy Football Scout Member
            • 4 Years
            1 month, 14 hours ago

            Sarr & Benrahma > Foden & Brownhill (-4)?

          12. reubster
            • Fantasy Football Scout Member
            • 10 Years
            1 month, 14 hours ago

            I can do Azpi+Raph > Chilwell+B.Silva...

            ... but only today because Chilwell will go up tonight...

            Should I?