Dollar-Cost Averaging (DCA) Calculator
See what you would have if you had invested the same amount in the S&P 500 every month (dollar-cost averaging), using real historical returns. It shows the historical result of mechanically buying on a schedule instead of timing the market.
How it works
What dollar-cost averaging is
Dollar-cost averaging (DCA) means investing a fixed amount at regular intervals — here, every month — regardless of the price level. You automatically buy fewer shares when the market is expensive and more when it is cheap, so no single entry point dominates your result.
How this projection works
Each month your contribution is added, then the balance compounds at a period return derived from the actual S&P 500 total return for each year. Annual figures are converted to a monthly rate and applied month by month, with dividends reinvested. All values are nominal and exclude taxes, trading fees, and inflation.
How to read your result
Final value is your ending balance, total invested is the sum of every contribution, and the gain is the difference between them. The annualized return reflects index performance over your chosen window, not a guaranteed rate.
Caveats
- Historically, investing a lump sum has beaten DCA roughly two-thirds of the time, because markets rise more often than they fall — yet DCA reduces regret and the risk of buying everything at a bad moment.
- Past performance does not guarantee future results; this assumed, return-based projection is an estimate, not a promise.
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Frequently Asked Questions
What is dollar-cost averaging (DCA)?
Investing the same amount on a regular schedule regardless of market conditions. You buy less when prices are high and more when they are low, which smooths your average purchase price.
Is DCA always better than investing a lump sum?
No. When markets trend up over time, investing a lump sum early tends to win on average — historically about two-thirds of the time. The real benefit of DCA is reducing timing stress and the risk of buying everything at a peak, not maximizing returns.
Does this calculator include dividends?
Yes. It uses annual total returns with dividends reinvested, so distributions are assumed to be put back to work rather than spent.
How are annual returns turned into monthly results?
The actual total return for each year is converted into an equivalent monthly rate and applied to your balance month by month, after each contribution is added. This smooths within-year swings while keeping the overall outcome for each year intact.
Why does my result change so much when I shift the start or end year?
Long-run outcomes are sensitive to which years fall inside your window, because a few strong or weak years carry heavy weight once they compound. Comparing several windows gives a more honest picture than any single run.
Can I rely on this projection for real planning?
Treat it as an educational estimate, not a promise. It assumes the past repeats and ignores taxes, fees, and inflation, so real outcomes will differ. Use it to build intuition, then confirm decisions with a qualified adviser.
This calculator is an educational estimate, not individual investment advice. Past returns do not guarantee future results. Taxes, fees, and inflation are not included.