DCA
End value $178,042
Total return +194.3%
Annualized (XIRR) +20.5%
Max drawdown 30%
What is dollar cost averaging?
Dollar cost averaging (DCA) means investing a fixed dollar amount on a fixed schedule — say, $500 on the first of every month — no matter what the market is doing. When prices are high, your $500 buys fewer shares; when prices drop, the same $500 buys more. That simple mechanic pulls your average cost per share below the average of the prices you bought at, and it removes the hardest question in investing ("is now a good time?") from the process entirely.
DCA is also how most people invest whether they call it that or not: money arrives with every paycheck, and a recurring buy puts it to work immediately. The strategy's real benefits are behavioral — no waiting for a dip that never comes, no panic-driven pause after a crash — plus measurably shallower portfolio drawdowns, because cash keeps arriving while prices fall. Its real cost is that in steadily rising markets it lags investing a lump sum up front, since money that waits on the sidelines misses compounding. The backtests below put actual numbers on both sides of that trade-off.
DCA vs Lump Sum: what the data says
Every number below was produced by this page's own backtest engine on real dividend-adjusted history — the same code that runs when you press Calculate — using $500 per month with no initial lump. You can reproduce any of them in the calculator above.
A strong decade favors lump sum — QQQ, Jan 2016 → Jan 2026
$500 a month put $60,500 to work and grew to $175,347 (+189.8%). The same $60,500 invested on day one ended at $369,949 (+511.5%) — more than twice the DCA outcome. When a market spends ten years mostly going up, dollars invested earlier simply compound longer.
Buying the 2021 top favors DCA — QQQ, Nov 2021 → Dec 2023
A lump sum dropped in at the November 2021 peak crawled to +7.4% two years later after riding the full 35% slide of 2022. The monthly plan ended at +25.4%, because every buy through the bear market lowered its average cost — and its portfolio drawdown was only 15% (cushioned by ongoing contributions) versus 35% for the lump sum.
The lost decade — S&P 500 (SPY), Jan 2000 → Jan 2010
The S&P 500 went nowhere for ten years, absorbing both the dot-com bust and the 2008 financial crisis. A lump sum at the start was still down −12.1% a decade later; the monthly plan finished at +2.5% — not a fortune, but positive — because it kept buying through two crashes at depressed prices.
The honest summary: if you already have the cash, lump sum wins more often than not, and often by a lot. DCA earns its keep in the bad starts — windows that open near a major top — and in the fact that most investors don't have a lump sum in the first place, just income. Run your own window above before trusting anyone's rule of thumb, including ours.
Popular backtests
Jump straight into a preloaded backtest for any supported ticker, or open the dedicated calculators for the two most requested funds:
FAQ
Is dollar cost averaging better than lump sum investing?
Usually not in raw end value — that is the honest answer. In most multi-year windows a lump sum finishes ahead, because markets rise more often than they fall and money invested earlier compounds longer. DCA tends to win when a window starts near a major peak (the S&P 500 in 2000, the Nasdaq-100 in late 2021), and it consistently produces shallower portfolio drawdowns along the way. Every result on this page shows both strategies side by side, so you can check any window yourself.
How often should I DCA — weekly, biweekly, or monthly?
It matters far less than starting and staying consistent. Over identical windows, weekly, biweekly and monthly plans in the same fund typically end within a fraction of a percentage point per year of each other. Pick the rhythm that matches your income — most people simply invest every payday. You can switch the frequency control above and compare all three on real history.
Does the calculator include dividends?
Yes. All backtests use adjusted close prices, which fold every dividend back into the series as if it were reinvested when paid (dividends assumed reinvested). That is the standard total-return convention, and it is why dividend-focused funds like SCHD look much stronger here than on a plain price chart.
Why does the average cost per share not match old quoted prices?
Because the price series is dividend-adjusted, past values are restated downward every time a dividend is paid. The average cost per share shown by the calculator is therefore on the adjusted scale and cannot be compared directly with the actual quoted prices from those dates.
What exactly does "Biweekly" mean here?
A purchase every 14 calendar days from your start date — about 26 buys per year. It is not the same as semi-monthly investing on the 1st and 15th (24 buys per year), which is how many US payrolls run. If a scheduled day is not a trading day, the buy executes on the next trading day without shifting any later buy dates.
Does the calculator support fractional shares?
Yes. Each purchase buys exactly amount ÷ price shares, fractional part included, matching how most modern brokers execute recurring investments. No cash sits uninvested between purchases.
Why is the DCA max drawdown smaller than the asset's own crash?
The DCA drawdown is measured on your portfolio value day by day while contributions keep flowing in, so fresh cash cushions every decline — the figure is naturally lower than the price drawdown of the asset itself. To keep that honest, the conclusion line always reports the asset’s own price drawdown over the same window right next to it.
How current is the data, and what does it cover?
Price histories are refetched in full and replaced daily, and every result states its exact cutoff ("Data as of …"). The current build uses data through Sep 11, 2026. ETF histories run from each fund's listing date (SPY back to January 1993), and the Bitcoin series covers more than a decade of daily closes, weekends included.
Does DCA work for QQQ?
QQQ is one of the most popular DCA targets, and its history is a demanding stress test: a monthly plan started at the March 2000 peak ended the following decade meaningfully positive while a lump sum made the same day was still deeply underwater. This site has a dedicated QQQ DCA calculator page with prebuilt QQQ and TQQQ scenarios, or you can select QQQ right here.
Can I backtest a Bitcoin DCA plan?
Yes — pick BTC in the ticker list. Bitcoin trades every day of the week, so weekend purchases execute on their actual scheduled date rather than the next business day, and the data set covers well over ten years of daily closes.