Dollar-Cost Averaging Calculator

What is dollar-cost averaging?

Dollar-cost averaging (DCA) means investing the same dollar amount at regular intervals, such as $100 every month, regardless of price. You buy more coins when the price is low and fewer when it is high, so your average cost per coin ends up at or below the simple average of the prices you paid.

How is the average cost per coin calculated?

Divide the total amount invested by the total coins bought. Because every purchase is the same dollar amount, this equals the harmonic mean of the prices, which is always at or below their ordinary average. In the default example, 12 purchases of $100 buy 0.03077285 coins, giving an average cost of $38,995.42.

Is DCA better than investing a lump sum?

Not on average. If prices trend upward, investing everything at the start wins, which is why the default scenario shows a 66.67% lump-sum return against 28.22% for DCA. Research from Vanguard on historical stock and bond markets found that lump-sum investing came out ahead roughly two-thirds of the time. DCA reduces the risk of buying just before a drop and the regret that follows.

When does DCA protect me?

It protects you most when prices fall or swing widely after you start. Set the starting price to $50,000 and the ending price to $30,000 and DCA loses 23.07% while the lump sum loses 40.00%, because later purchases were made at lower prices.

What does the price path simulation do?

It builds a price for each period between your starting and ending price. Smooth growth is a straight line. The moderate and high volatility options add a fixed wave of ±20% or ±40% around that line. The wave is a repeatable pattern, not a forecast, so the same inputs always give the same answer.

Should I invest weekly, bi-weekly or monthly?

Over long periods the difference is small. Pick the interval that matches how you are paid and keep trading fees low, because a flat fee on a small weekly purchase eats a larger share of each buy than the same fee on one monthly purchase.

What happens if I leave a box empty or enter 0?

An emptied box counts as 0. A starting price of 0 or 0 periods cannot be used, so the tool shows a message asking for a value above 0. A regular investment of 0 is treated as a plan with no contributions: the portfolio value, total invested and coins are all 0.00, and the ROI lines and average cost show n/a because there is nothing to divide by. An ending price of 0 is allowed and shows a total loss of −100% on both the DCA and lump-sum lines.

Does the calculator include fees and taxes?

No. Exchange fees, spreads and taxes are not modelled. Each purchase is a separate lot with its own cost basis in most tax systems, so keep records of every buy. Rules differ by country, so check your local treatment.