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Dollar-Cost Averaging Calculator
Model a dollar-cost averaging (DCA) plan: invest a fixed amount every month and see your average cost, shares accumulated and how it compares with investing a lump sum.
What is dollar-cost averaging?
Dollar-cost averaging means investing the same dollar amount on a regular schedule, regardless of the price. When prices are low your fixed amount buys more shares, and when prices are high it buys fewer, so your average cost per share ends up below the average market price over the period.
DCA vs. lump sum
Historically, investing a lump sum right away has often come out ahead because markets tend to rise over time. DCA trades some of that expected return for a smoother experience and less risk of investing everything just before a fall. For most people investing from each paycheck, DCA happens naturally.
Reading your results
The calculator simulates investing a fixed amount every month into a share price that grows at your expected rate with the amount of up-and-down movement you choose. It reports your total invested, final value, shares accumulated, and two key averages: your average cost per share and the average market price over the period. Because a fixed dollar amount buys more shares when prices are low, your average cost usually ends up below the average price, and the gap widens as volatility rises.
DCA vs. lump sum
The results also show what would have happened if you had invested the same total on day one. In a market that mostly rises, the lump sum usually wins because more money is invested for longer; historical studies have found lump-sum investing came out ahead roughly two-thirds of the time. Dollar-cost averaging tends to win when prices fall early in the period, and it reduces the regret of investing everything right before a drop. For most people investing from each paycheck, DCA is simply the natural way to invest.
Related guides
Dollar-cost averaging explained · How to start investing with little money · Bull vs. bear markets · What is an ETF? · Compound interest calculator
Frequently asked questions
How often should I invest?
Monthly is common because it matches most pay cycles. Weekly or every paycheck works too. What matters most is staying consistent through ups and downs.
Is the price path in this calculator a forecast?
No. It is an illustrative path that rises with your growth assumption and swings with your volatility setting, so you can see how averaging works. Real prices are unpredictable.
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