Dollar Cost Averaging Calculator
Use a dollar cost averaging simulator to compare a lump sum investment with equal purchases over time
DCA vs. lump sum investing
When cash is already available, lump sum investing puts it to work sooner, while dollar cost averaging spreads equal purchases across the selected period. Neither approach is universally better. This calculator provides an illustration based on your entered return and volatility assumptions, not a prediction of future results.
Neither approach is universally better. This illustration uses your entered assumptions and is not a prediction of future results.
Strategy Comparison
Portfolio Value Over Time
Read the full explanation
When cash is already available, lump sum investing puts it to work sooner, while dollar cost averaging spreads equal purchases across the selected period. Neither approach is universally better. This calculator provides an illustration based on your entered return and volatility assumptions, not a prediction of future results.
Understanding Dollar Cost Averaging
Lump sum investing puts available cash to work sooner, while dollar cost averaging spreads purchases across time. Neither approach is universally better.
DCA vs. Lump Sum: What the Comparison Shows
When cash is already available, lump sum investing gives it more time in the market and may produce a higher ending value under a rising price path. DCA can reduce the pressure of choosing one entry date by spreading purchases across the selected period.
- Lump sum invests the full amount on day one.
- DCA invests equal amounts each month.
- DCA may make it easier to follow a consistent plan.
- A higher modeled value does not establish which strategy is right for you.
Simulation Assumptions and Limits
This calculator uses your expected annual return and volatility to create a deterministic sine-wave price path, then applies the two contribution schedules to that same path. The result is an illustration under entered assumptions, not a forecast of market behavior or future performance.
- The model does not simulate a range of possible market paths.
- It does not account for taxes, fees, dividends, or fund-specific behavior.
- Actual returns can differ materially from the entered assumptions.
When DCA May Fit
DCA may be useful when you invest from regular income, prefer a repeatable schedule, or want to reduce the emotional impact of selecting one investment date.
- Automate your investments to remove emotion.
- Review the plan against your cash flow and risk tolerance.
- Keep the difference between an illustration and a forecast in mind.