Dollar Cost Average Calculator

DCA vs Lump Sum: Which Is Better?

Dollar cost averaging means investing a fixed amount at regular intervals (for example, $1,000 per month for 12 months) instead of investing all your money at once. The advantage is that you buy more shares when prices are low and fewer when prices are high, which can reduce the impact of market volatility on your returns.

Historically, lump sum investing beats DCA about two-thirds of the time because markets tend to go up over time — so getting your money in earlier gives it more time to grow. However, DCA reduces your risk of investing everything right before a market downturn, and it can be psychologically easier to invest gradually.

The best strategy is the one you'll actually follow through on. If a large lump sum investment makes you anxious, DCA is a perfectly sound approach that still puts your money to work in the market. Explore our stock directory to find investment opportunities.