Dollar-Cost Averaging Calculator
See how regular buying smooths out price swings.
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Dollar-Cost Averaging Calculator by TheCalcTools
How the Dollar-Cost Averaging Calculator works
Enter the fixed amount invested at each of four dates and the share price on each.
Shares bought each time are the amount divided by the price.
Your average cost is total invested divided by total shares. It is the harmonic mean of the prices.
The formula
Worked example
Using the default values shown in the calculator:
| Amount invested each time | $500 |
|---|---|
| Price at buy 1 | $50 |
| Price at buy 2 | $40 |
| Price at buy 3 | $55 |
| Price at buy 4 | $60 |
- Shares = 500/50 + 500/40 + 500/55 + 500/60 = 39.924.
- Average cost $50.09 vs simple average price $51.25.
Result:
| Shares bought | 39.924 |
|---|---|
| Average cost per share | $50.09 |
| Simple average of the prices | $51.25 |
| Value at the last price | $2,395.45 |
| Gain or loss at the last price | $395.45 |
Frequently asked questions
Why is the average cost lower than the average price?
A fixed dollar amount buys more shares when prices are low, so the average cost is the harmonic mean, which is never above the arithmetic mean.
Does DCA beat lump-sum investing?
On average, historical studies find lump-sum investing performs better because markets tend to rise, but DCA reduces the regret and risk of poor timing.
Sources and further reading
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.