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Dollar Cost Averaging Calculator

Averaging in against a lumpsum on the same price path. Buying a fixed amount each period gives the harmonic mean of prices, which is mathematically at or below the arithmetic mean.

Also called: dca calculator, lumpsum vs sip.

$

Separate values with commas or spaces.

Average cost per unit
97.93

97.93 per unit against a simple average price of 98.5. Averaging in bought 122.54 units where a lumpsum at the first price would have bought 120. On this price path averaging in did better, because the price fell after the start.

Simple average price
98.5
Units acquired
122.54
Units from a lumpsum at the start
120
Value of the averaged position
$12,621.67
Value of the lumpsum position
$12,360.00
Which did better here
On this price path averaging in did better, because the price fell after the start.
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

A fixed amount buys more units when the price is low and fewer when it is high, so the average cost is the harmonic mean rather than the arithmetic mean of the prices. That inequality is guaranteed by the mathematics, which is a genuine and often overstated advantage: it means your average cost beats the average price, not that averaging beats a lumpsum. On a rising market a lumpsum wins because the money was invested earlier, and historically markets rise more often than not.

buying a fixed amount gives the harmonic mean of prices, which is always at or below the simple average
p
Prices

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a year of monthly buys

Total to invest
$12,000.00
Spread over how many periods
12
Price at each period
100, 92, 105, 88, 96, 110, 102, 85, 94, 108, 99, 103

Average cost per unit97.93

The arithmetic mean of the twelve prices is 98.5. Buying 1,000 of stock at each price gives 122.5405 units for 12,000, so the cost per unit is 97.93: the harmonic mean, which is always at or below the arithmetic one. Worked separately.

Open this example

a flat price makes the two means equal

Total to invest
$12,000.00
Spread over how many periods
3
Price at each period
100, 100, 100

Average cost per unit100

boundary: with no variance the harmonic and arithmetic means coincide, which is the only case where they agree

Open this example

Method and limits

What it assumes

  • Equal amounts invested at each price given.

What it deliberately does not model

  • It compares one price path. The result depends entirely on the path you enter.
  • Cash waiting to be invested earns something, which is not modelled.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Is averaging in better than a lumpsum?
Usually not, on historical data, because markets rise more often than they fall and a lumpsum is invested longer. Averaging reduces regret and the risk of a bad entry, which is a behavioural benefit rather than a mathematical one.
Why is my average cost below the average price?
Because a fixed amount buys more units at low prices. That gives the harmonic mean, which is always at or below the arithmetic mean unless every price is identical.