DCA versus lump sum
Lump sum buys everything on day one and holds; dollar-cost averaging (DCA) splits the same money into equal purchases to build an average cost. This calculator compares final value and return for both on an assumed price path.
How it plays out by path
- Steady rise: money invested earlier compounds longer, so lump sum tends to win.
- Steady decline: splitting lowers the average cost so the loss is smaller (both lose).
- Drop then recovery (V) and choppy paths: DCA buys more units near the bottom and tends to win.
Use your own prices
Enter monthly prices (comma-separated) under "Your own prices" to run that exact path. The first value is the first purchase price and the last is the valuation price.
Caveats
Future prices are unknown and the comparison rests on simple assumptions. Some research finds lump sum wins more often in rising markets over long periods, but your risk tolerance and cash flow matter more. Not investment advice.
FAQ
Is DCA always safer?
It does not prevent losses; it spreads purchase timing so you are less likely to buy everything at a peak.
When does lump sum do better?
When prices rise steadily, because earlier money has longer to grow.
What interval is assumed?
Equal purchases once a month.
Are fees and taxes included?
No — it is a like-for-like comparison.