Dollar cost averaging (DCA) calculator. Model monthly buys, average share price, and long-term growth vs lump sum. Free, no signup.
Dollar-cost averaging: investing $500/month into a volatile asset smooths entry price over time. Compare lump sum vs DCA and see average cost per share across market dips and rallies.
It mitigates timing risk by spreading purchases over fixed regular intervals, lowering emotional bias and guaranteeing buying more shares when prices drop.
Lump sum wins statistically in rising markets; DCA reduces regret and timing risk in volatile or falling markets. Many investors DCA because behavior matters as much as math.
Monthly matches most paychecks and is simple. Weekly slightly smooths more but differences are usually small versus staying consistent for years.
No — it only averages purchase price over time. If the asset trends down for years, DCA still loses. It is a discipline tool, not a hedge.