Dollar-Cost Averaging Simulator
Compare DCA strategy versus lump sum investing with historical simulations
Simulation Parameters
DCA vs Lump Sum Performance
Strategy Comparison
Dollar-Cost Averaging
Total Invested:$60,000
Final Value:$89,264
Total Return:48.77%
Profit/Loss:$29,264
Lump Sum
Total Invested:$60,000
Final Value:$115,316
Total Return:92.19%
Profit/Loss:$55,316
In this simulation, lump sum outperformed DCA by $26,052, benefiting from earlier market exposure.
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Understanding the Concept
Dollar-cost averaging (DCA) involves investing a fixed amount regularly, regardless of market conditions. This strategy can reduce the impact of volatility by buying more shares when prices are low and fewer when prices are high.
Tips to Optimize
- •DCA reduces timing risk and emotional decision-making
- •Works best in volatile or declining markets
- •Lump sum investing often outperforms in rising markets
- •Consider your risk tolerance and cash availability