Dollar-Cost Averaging Calculator
Dollar-cost averaging means investing a fixed amount on a regular schedule instead of all at once. This projects what your contributions grow to at an assumed return — and, honestly, sets it side by side with investing the same total as a lump sum, because which one wins isn't the answer most calculators want to give you.
At a rising assumed return, lump sum ends ahead — its whole balance compounds for the full time, while DCA holds cash on the sidelines that hasn't been invested yet. That gap is the real cost of averaging in. A constant assumed rate is a simplification: real returns arrive in a bumpy, unknowable order, and this projects — it does not predict.
Most DCA tools quietly cheerlead the habit. The honest picture is a trade-off, and it turns entirely on which way the market goes over your horizon:
- • If markets rise (the usual case), lump sum wins — its whole balance compounds for the full time, while DCA leaves money sitting in cash waiting for its turn. That cash drag is the cost of averaging in.
- • If markets fall over your horizon, DCA wins — feeding money in slowly keeps more of it out of the decline.
- • Because markets rise more often than they fall, the research finds lump sum comes out ahead most of the time — but DCA still earns its place: it's what you actually do when you invest each paycheck, and it caps the regret of putting everything in right before a crash.
A projection at a constant assumed rate, not a forecast — real returns arrive in a bumpy, unknowable order. The deeper comparison, with the research and the numbers, is in DCA vs lump sum: what actually wins. Educational tool, not advice.
A calculator shows what a rule should do on paper. Whether a strategy actually beats simply buying and holding — costs on, losses shown, no hindsight — is a different question, and the only one that pays. Most rules don't beat holding; the backtest is how you find the rare few that do — so when you build one that survives, you'll know it isn't a fake edge, then prove it forward before you risk real money. It won't tell you you'll win — nothing honest can.