DCA $300/Month at $15, $12, $18, $20
Investing $300 per month at prices of $15, $12, $18, and $20 shows the benefit of buying extra shares during the price dip.
How to use this tool
- Enter the fixed dollar amount you invest each period.
- Enter the share price at each purchase (use 0 to skip a period).
- Read your average price per share across all purchases.
- Check total shares bought and total dollars invested.
- Compare your average price with the simple average of the prices.
Find your average cost per share when dollar-cost averaging through a market dip and subsequent rally.
Frequently asked questions
- What is dollar-cost averaging?
- It is investing a fixed dollar amount at regular intervals. You buy more shares when prices are low and fewer when high, smoothing out your average purchase price.
- Why is the average price below the average of the prices?
- Because a fixed dollar amount buys more shares at low prices, low-price periods carry more weight in the share-weighted average, pulling it below the simple average of the prices.
- Is DCA better than investing a lump sum?
- On average, historically, lump-sum investing has produced higher returns because markets usually rise. DCA mainly reduces the risk of bad timing and fits investing from a regular paycheck.
- Can I use fewer than four purchases?
- Yes. Enter 0 for any price you want to skip and the calculator ignores that period.