Dollar Cost Averaging Calculator
Compare dollar-cost averaging (DCA) — investing the same amount each month — vs lump-sum investing. Volatile markets often favor DCA for risk reduction.
Inputs
About Dollar Cost Averaging Calculator
DCA vs lump sum: which wins?
Historical data: lump sum beats DCA about 2/3 of the time because markets trend up — investing all at once captures more growth. But DCA reduces regret if the market crashes right after you invest. Use DCA for psychological comfort and risk reduction.
When DCA shines
High-volatility assets (crypto, small-caps). When you have ongoing income (paycheck-driven 401k contributions are inherently DCA). When markets are clearly overheated. To reduce timing risk on a windfall.
Simulation caveats
This is a simplified linear-plus-sine simulation. Real markets are unpredictable — past performance doesn’t indicate future results. Use as a teaching tool, not for predicting actual outcomes.