The Finance Algorithm

Dollar Cost Averaging Calculator

Compare dollar cost averaging vs lump sum investing. See which strategy works best based on market conditions.

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$60k

The total sum you want to invest

12

How many months to spread your investment over

%
8%

The yearly return you want to assume. Past returns don't predict future ones.

Which scenario wins flips with the path the market takes

The type of asset you're investing in

$
$5

DCA = N trades, lump sum = 1. Adds up at higher brokerage

The button asks our AI to explain these figures in words.

DCA vs lump sum

Lump sum

$64,795

One trade at $100.00 a unit, finishes ahead

Dollar cost averaging over 12 months

$62,608

12 trades at $103.40 a unit on average

Lump sum finishes $2,187 ahead under this scenario. Markets that drift up steadily favour getting fully invested early.

Synthetic price path used for this comparison

Starts at 100 and drifts based on your expected return + the scenario shape.

$0$28$56$84$112M0M2M5M7M10M12

Lump sum vs DCA balance, month by month

Lump sum is fully invested from t=0. DCA scales in over the period: slower to grow but cushioned in dips.

  • Lump sum
  • DCA

Lump sum

$0k$17k$34k$51k$67kM0M2M5M7M10M12

Dollar cost averaging

$0k$16k$31k$47k$63kM0M2M5M7M10M12

What you pay just to execute the strategy

DCA's frequent trades add up at higher per-trade fees.

Lump sum$5DCA$60

How it works

Dollar cost averaging means putting in the same amount at regular intervals, whatever the market's doing, instead of investing a lump sum all at once. Vanguard's research found the lump sum came out ahead about two-thirds of the time, because markets rise more often than they fall. The case for spreading it out is mostly about nerves: you never put everything in the day before a fall. This compares the two on your numbers.

  1. 1Enter the total amount you want to invest.
  2. 2Choose how many months to spread your DCA over.
  3. 3Set your expected annual return rate.
  4. 4Select the market conditions you expect.
  5. 5Choose your investment type and brokerage cost.
  6. 6Compare the projected outcomes of DCA vs lump sum.

Worked examples

Lump Sum in a Rising Market

Alice invests a $100,000 inheritance either all at once or over 12 months, in a market that rises steadily by 10% over the year.

Total amount to invest
$100,000
DCA period (months)
12
Expected annual return
10%
Expected market conditions
Steadily rising market
Investment type
ETF/Index Fund
Brokerage per trade
$0

All at once: $110,000 after 12 months. Spread over 12 months: about $105,300, because later purchases were made at higher prices. In a rising market, investing sooner wins.

Spreading It Out in a Dip

The same $100,000, in a market that falls in the first half of the year and recovers to where it started by month 12.

Total amount to invest
$100,000
DCA period (months)
12
Expected annual return
0%
Expected market conditions
Declining then recovering
Investment type
ETF/Index Fund
Brokerage per trade
$0

All at once: $100,000, back where it started. Spread out: about $110,800, because more units were bought at lower prices - an average cost of about $90.26 a unit against $100.

Questions people ask

Should I invest a lump sum or use DCA?
Studies of past markets, including Vanguard's, found investing a lump sum straight away beat spreading it out about two-thirds of the time, because markets rose more often than they fell. Spreading it out reduces the regret of investing just before a fall. It comes down to how you'd cope with a drop soon after investing.
How often should I invest with DCA?
Monthly is most common and practical (aligns with salary). Weekly or fortnightly also works but incurs more brokerage costs. Less frequent than monthly (e.g., quarterly) may be too slow to deploy your capital. Over 12 months is the sweet spot for most people.
Does DCA work for crypto?
DCA is actually more useful for highly volatile assets like crypto, where timing the market is nearly impossible. By investing a fixed amount regularly, you smooth out the extreme price swings. However, only invest in crypto what you can afford to lose entirely.

The terms, in plain English

Dollar Cost Averaging (DCA)
An investment strategy where you invest a fixed dollar amount at regular intervals, regardless of the current price. You buy more units when prices are low and fewer when prices are high.
Lump Sum Investing
Investing all available capital at once rather than spreading it over time. Historically produces higher returns but with more short-term volatility risk.
Average Cost Basis
The average purchase price of your investments when bought at different prices over time. DCA typically results in a lower average cost basis in volatile markets.

Official sources

ETF Returns Calculator

Calculate expected returns on the ETFs you're DCA-ing into.

Compound Interest Calculator

See how regular contributions compound over the long term.

Savings Goal Calculator

Plan your regular investment amounts toward a specific target.