Dollar-Cost Averaging (DCA) Calculator
See why investing a little each month beats trying to time the market.
Compare DCA vs lump sum with CAGR analysis and inflation adjustment.
What is dollar-cost averaging?
Instead of trying to time the market (which even experts get wrong), DCA means you invest the same amount every month no matter what. When prices are high you buy less. When prices are low you buy more. Over time this smooths out the bumps and removes the stress of guessing.
The real power of DCA isn't just the strategy — it's the consistency. Investing $300/month is about $10 a day. Most people spend that without thinking. The habit of investing automatically, every month, is what separates people who build wealth from those who don't.
Dollar-cost averaging eliminates timing risk by spreading purchases across market cycles. While lump-sum investing statistically outperforms DCA in rising markets (approximately 2/3 of the time based on historical data), DCA reduces variance and behavioral risk. This calculator assumes constant rate of return — real-world DCA benefits are most pronounced in volatile markets.
CAGR is back-calculated from the final DCA value and total invested: CAGR = (FV/PV)^(1/t) − 1. With annual contribution increases, each year's monthly PMT is scaled by (1 + g)^yr. Inflation adjustment uses compound deflation on the nominal final value.