DCA vs Lump Sum Backtester
See how Dollar Cost Averaging compares against a one-time lump sum investment. Understand the power of consistent contributions over time.
DCA vs Lump Sum
Derived from (Total − Upfront) ÷ months
Growth Comparison Over Time
InteractiveDollar Cost Averaging Explained
Dollar Cost Averaging means investing a fixed amount at regular intervals regardless of market price. You buy more shares when prices are low and fewer when prices are high, potentially lowering your average cost per share.
This calculator compares Lump Sum vs DCA using the same total capital. Enter your total investable amount under "Total Investment Capital" and decide how much goes in on Day 1 (upfront). The remainder is spread evenly over 12 months as your DCA plan — ensuring neither strategy has an unfair capital advantage.
Where P = initial investment, PMT = monthly contribution, r = annual return, t = years. For lump sum, PMT = 0.
Frequently Asked Questions
DCA vs Lump Sum: which is better?
Historically, lump sum investing outperforms DCA about 66% of the time in rising markets because money spends more time compounding. However, DCA reduces emotional stress and timing risk, making it better for many investors.
Does DCA work in bear markets?
Yes! In declining markets, DCA lets you buy more shares at lower prices. When the market recovers, those additional shares amplify your gains. This is why DCA is often recommended for volatile markets.
What is a good DCA amount?
A good DCA amount is whatever fits your budget consistently. Even $100/month invested in a broad market index fund over 30 years can grow to over $150,000 at 8% returns. Consistency matters more than amount.