Dollar-Cost Averaging Calculator
Calculate how regular investments grow over time. DCA helps reduce timing risk and builds wealth systematically through consistent investing.
Top ETFs for Dollar-Cost Averaging
Low-cost, diversified ETFs ideal for systematic monthly investing.
VTI - Total US Market
4,000+ US stocks in one ETF. 0.03% expense ratio. Perfect for long-term DCA with ultimate diversification.
Top PickVT - Total World Stock
Global exposure in one fund. US + International stocks. 0.07% expense ratio. One-fund DCA solution.
GlobalVOO - S&P 500
500 largest US companies. 0.03% expense ratio. ~10% historical return. Most popular DCA choice.
PopularVT + BND Portfolio
Combine VT (stocks) with BND (bonds) for balanced DCA. Adjust ratio based on risk tolerance and age.
BalancedHow Dollar-Cost Averaging Works
The Power of Consistent Investing
With DCA, you invest a fixed amount regularly regardless of market prices. When prices are low, your fixed amount buys more shares. When prices are high, you buy fewer shares. Over time, this averages out your cost per share.
DCA Example: $500/month into an ETF
| Month | Price | Shares Bought | Total Shares |
|---|---|---|---|
| January | $100 | 5.00 | 5.00 |
| February | $80 | 6.25 | 11.25 |
| March | $90 | 5.56 | 16.81 |
| April | $110 | 4.55 | 21.36 |
| May | $95 | 5.26 | 26.62 |
Average cost per share: $93.99 (vs. average price of $95)
DCA vs. Lump Sum Investing
DCA Advantages
- Reduces timing risk
- Emotionally easier
- Works with regular income
- Builds discipline
Lump Sum Advantages
- Higher expected returns (2/3 of time)
- More time in market
- Lower transaction costs
- Simpler to execute
Bottom line: If you have a lump sum, investing it all at once historically performs better. But if you're investing from regular income (like most people), DCA is the natural and effective approach.
Frequently Asked Questions
Dollar-Cost Averaging is an investment strategy where you invest a fixed amount of money at regular intervals (weekly, monthly, etc.), regardless of market conditions. This approach reduces the impact of volatility and eliminates the emotional stress of trying to time the market perfectly.
Monthly investing is most common and aligns with pay schedules. Weekly or bi-weekly can provide slightly better averaging but adds complexity. The key is consistency - pick a schedule you'll stick with long-term.
Yes! DCA is especially valuable for volatile assets like Bitcoin and Ethereum. The high volatility means you'll buy at many different price points, averaging out the extreme swings. Many crypto investors use weekly DCA for assets like BTC and ETH.
No - down markets are when DCA works best! Your fixed investment buys more shares when prices are low. Stopping during downturns means you miss the opportunity to accumulate shares at discount prices. Stay the course!
