Finance & Personal MoneyDCA vs Lump Sum Simulation

Dollar Cost Averaging Calculator

Simulate disciplined Dollar Cost Averaging (DCA) across bull, bear, and volatile market cycles to calculate average share purchase costs.

Average Purchase Price
$114.28/share
Total Shares Acquired
52.5 Shares
Ending Portfolio Value
$6,825.00
DCA Net Gain
+$825.00 (+13.8%)

Dollar Cost Averaging Formulas

Shares Acquired This Month = Monthly Dollars / Current Share Price | Average Cost Per Share = Total Dollars Invested / Total Shares Acquired
  • DCA Mechanism: When market prices drop, your fixed monthly dollar contribution automatically buys more shares; when prices rise, you buy fewer shares.
  • Average Purchase Price: Almost always lower than the average market share price due to buying more shares at local lows.
  • Lump-Sum Comparison: Simulates investing 100% of the capital on Day 1.

Step-by-Step Worked Example

Scenario:

Calculation Steps:

    Result:

    How to Use This Calculator

      Assumptions & Limitations

      • Models systematic monthly execution without trying to time market tops or bottoms.

      Frequently Asked Questions

      Is Dollar Cost Averaging better than Lump Sum investing?

      Historically, Vanguard research shows lump sum beats DCA about 68% of the time because markets rise long-term. However, DCA provides vital psychological protection against investing right before a sharp market correction.

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