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Dollar Cost Averaging Calculator

See how regular investing smooths out market volatility and lowers your average cost per share.

Investment per period

Amount you invest each period

Investment frequency

Starting share price

Ending share price

Price volatility

How much prices fluctuate (typical: 15-25%)

Number of periods

periods

Dollar Cost Averaging

Dollar cost averaging (DCA) is an investment strategy where you invest a fixed amount at regular intervals, regardless of the asset's price. This reduces the impact of volatility by spreading purchases over time, lowering your average cost per share.

How to Use

1. Enter how much you invest each period
2. Set the starting and ending share prices
3. Adjust volatility to simulate market fluctuations
4. Choose investment frequency and duration
5. Click Calculate to see your DCA results

DCA vs Lump Sum

DCA is better when:

• You're investing from regular income
• Markets are volatile or declining
• You want to reduce emotional decisions

Lump sum is better when:

• You have a windfall to invest
• Markets are trending upward
• Time in market matters more than timing

FAQ

What's a realistic volatility setting?

The S&P 500 has historical volatility around 15-20%. Individual stocks can be 25-50%+. Bonds are typically 5-10%.

How often should I invest?

Monthly is most common and practical. More frequent investing (weekly) provides marginally better averaging but may incur more transaction costs.

Does DCA work in a falling market?

Yes! DCA shines in volatile or falling markets because you buy more shares when prices are low, lowering your average cost for when markets recover.

Calculator Limitations

• Uses simulated price movements
• Does not account for dividends
• Excludes transaction fees and taxes
• Past patterns don't guarantee future results
• For educational purposes only

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