How does DCA reduce average cost?

By investing a fixed dollar amount, you buy more shares when prices are low and fewer when high. This naturally lowers the average cost per share versus a lump sum at any fixed price.

Is DCA better than lump sum investing?

Lump sum beats DCA about 2/3 of the time in rising markets. DCA reduces regret risk and is best when you cannot invest a lump sum or fear market timing.

Example: $500/month into stock at $10, $8, $12

50 + 62.5 + 41.67 = 154.17 shares for $1,500. Average cost = $9.73 vs average price of $10. DCA yielded a 2.7% discount.

Dollar-Cost Averaging Price Calculator

Calculate the average cost per share when investing fixed amounts at different prices. Shows how DCA reduces average cost vs lump sum at market peak.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate the average cost per share when investing fixed amounts at different prices. Shows how DCA reduces average cost vs lump sum at market peak. Use the dca average price result to inform your calculation.

Related Calculators

Cost Basis

Finance & Accounting

Diversification Ratio

Finance & Accounting

CAGR Calculator

Finance & Accounting

Dollar-Cost Averaging Price Calculator

How to Use

Related Calculators

Frequently Asked Questions

How does DCA reduce average cost?

Is DCA better than lump sum investing?

Example: $500/month into stock at $10, $8, $12