DCA Calculator

Dollar cost averaging (DCA) is the strategy of investing a fixed amount at regular intervals — typically monthly — regardless of market conditions. When prices are high, your fixed amount buys fewer shares; when prices are low, it buys more. Over time, this reduces your average cost per share and smooths out market volatility.

Academic research shows that lump-sum investing outperforms DCA roughly two-thirds of the time, because markets tend to rise over time. However, DCA offers meaningful benefits: lower emotional stress, protection against buying at peaks, and the discipline of regular saving. For most people who invest from their paycheck, DCA is the natural approach.

Investing $500 per month at a 10% annual return over 30 years produces over $1.1 million. Your total contributions of $180,000 make up less than 17% of the final balance. The other 83% is pure compound growth — the reward for staying consistent through every market cycle.

• Automate transfers on payday so you invest before you spend.
• Stay invested during downturns — market drops are when DCA works hardest for you.
• Use low-cost index funds — an S&P 500 fund with a 0.03% expense ratio keeps virtually all your money working.
• Increase contributions with raises — even an extra $50/month each year makes a big difference over decades.