Dollar-Cost Averaging Calculator
Dollar-cost averaging invests fixed amounts on a schedule regardless of price — buying more shares when cheap, fewer when expensive. Model your plan and see the average cost it produces versus going all-in at once.
Your results
Charts & visualization
Contributions vs portfolio value
The gap between the lines is cumulative market gain on your accumulating position.
Same money, different timing.
Every chart’s underlying numbers are available as text — use the “view as table” control under each chart.
How it works
The simulator buys shares with your fixed monthly amount at an assumed price path (your chosen steady trend), tracking every purchase. Average cost emerges naturally: expensive months buy fewer shares, cheap months buy more, pulling your average toward the middle of the range.
The lump-sum comparison invests an equal amount immediately instead. Historically, immediate lump-sum investing wins roughly two-thirds of the time because markets rise more often than fall — DCA’s advantage is behavioral (no agonizing over entry points) and its insurance against buying right before a crash.
Formula used
Price(t)— assumed price each month along your trendAvg cost— blended purchase price of all sharesLump sum— all cash invested at today’s price instead
Example calculation
Investing $300 monthly for ten years deploys $36,000 across a rising price trend, ending with a portfolio worth about $48,742 — an average cost of $237 per share versus the $180 starting price. A $3,600 lump sum invested day one instead would finish near $6,416. Same market, different paths: DCA traded some expected return for steadier execution.
Assumptions & limitations
- Prices follow a smooth trend; real markets move unevenly, changing year-by-year outcomes.
- No trading fees, taxes, or dividend reinvestment modeled.
- Purchases occur monthly at the period price.
- The comparison is illustrative — past patterns do not dictate future sequences.
Results are planning estimates based on your inputs and the stated assumptions — not financial advice or a loan offer. Verify important figures with your lender or advisor.
Frequently asked questions
What does dollar-cost averaging mean?
Investing a fixed dollar amount at regular intervals regardless of price. Higher prices mean fewer shares purchased and vice versa, which lowers the average cost per share compared with buying a fixed number of shares each period.
DCA or lump sum — which is better?
Research generally favors lump-sum investing for expected returns, since markets rise more often than they fall. DCA reduces regret risk and spreads entry timing, which helps investors who might otherwise stay in cash.
Is DCA the same as automatic investing?
Effectively yes when contributions come from regular income. The distinction blurs because most people invest as they earn — which is DCA by construction.
When does DCA clearly beat lump sum?
During declines or flat markets after the lump-sum date. Since nobody knows the path ahead, choose based on temperament and cash availability rather than prediction.