Dollar Cost Averaging (DCA) Calculator

Calculate your returns from Dollar Cost Averaging strategy and compare it with lump sum investing. See how DCA helps reduce the impact of volatility.

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DCA Strategy

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Lump Sum Strategy

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What is Dollar Cost Averaging?

Dollar Cost Averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the asset's price. This approach helps reduce the impact of volatility and eliminates the need to time the market.

Benefits of DCA

  • Reduces emotional decision-making
  • Eliminates the need to time the market
  • Can reduce average purchase price in volatile markets
  • Makes investing more accessible and consistent
  • Helps build discipline and habit

When DCA Works Best

  • In volatile, sideways, or declining markets
  • When you can't predict short-term price movements
  • For long-term investment horizons
  • When investing regular income (salary)
  • To reduce risk of poor timing

Note: Historically, lump sum investing outperforms DCA about 2/3 of the time in steadily rising markets. However, DCA significantly reduces risk and regret when markets decline after your investment.

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