Dollar Cost Averaging Calculator

Compare dollar cost averaging vs lump sum investing. See how regular investments smooth out volatility and build wealth over time.

Total Amount to Invest

Investment Frequency

$1,000.00 per month

Time Period: 12 months

3 mo10 yrs

Expected Annual Return: 10%

-20%30%

Market Volatility: 20%

Low (5%)High (60%)

Periods12

Per Period$1,000.00

Avg Cost/Share$105.16

Lump Sum Wins in This Scenario

Lump sum returned 19.21% vs DCA's 13.36%. In trending markets, getting invested early captures more upside.

Dollar Cost Averaging

Final Value$13,603

Total Invested$12,000

Return$1,603

ROI13.36%

Lump Sum

Final Value$14,305

Total Invested$12,000

Return$2,305

ROI19.21%

DCA Investment Schedule

#	Invested	Price	Shares	Value
1	$1,000.00	$99.11	10.090	$1,000.00
2	$2,000.00	$97.04	20.395	$1,979.18
3	$3,000.00	$98.19	30.579	$3,002.66
4	$4,000.00	$98.57	40.725	$4,014.06
5	$5,000.00	$104.87	50.261	$5,270.60
6	$6,000.00	$103.92	59.883	$6,223.26
7	$7,000.00	$103.82	69.516	$7,216.82
8	$8,000.00	$110.24	78.586	$8,663.71
9	$9,000.00	$107.15	87.919	$9,420.86
10	$10,000.00	$112.47	96.810	$10,887.99
11	$11,000.00	$112.17	105.725	$11,859.48
12	$12,000.00	$119.21	114.114	$13,603.28

Dollar Cost Averaging Explained

Dollar cost averaging (DCA) is an investment strategy where you invest a fixed amount at regular intervals regardless of market conditions. When prices are low, you buy more shares; when prices are high, you buy fewer. This naturally lowers your average cost per share over time.

Research shows that lump sum investing outperforms DCA about two-thirds of the time in rising markets, because money invested earlier has more time to grow. However, DCA significantly reduces the risk of investing a large sum at a market peak, making it psychologically easier and reducing maximum drawdown.

DCA is particularly effective for investors who receive regular income (salary), want to reduce timing risk, or are investing in volatile assets like individual stocks or crypto. Many 401k plans are inherently DCA strategies since contributions come from each paycheck.