DCA vs. Lump Sum Explorer

Strategy A

Dollar-Cost Averaging

Invest a fixed dollar amount at regular intervals — regardless of the market price. When prices are low, you automatically buy more shares. When prices are high, you buy fewer. Over time, this smooths your average cost per share.

Reduces timing risk — no need to predict the market

Enforces discipline through automatic, regular investing

Psychologically easier — less fear of buying at the "wrong" time

Ideal when capital is earned incrementally (salaries, bonuses)

Strategy B

Lump Sum Investing

Deploy all available capital immediately. Because markets tend to rise over time, getting money invested sooner maximizes the time it spends growing. Studies show lump sum beats DCA roughly two-thirds of the time in rising markets.

More time in the market = more time compounding

Outperforms DCA in bull markets (historically ~66% of the time)

Fewer transaction costs and decisions over time

Optimal when a large sum becomes available (inheritance, sale, bonus)

⬡ The Core Question

If you inherited $60,000 today — would you invest it all at once, or spread it over 12 months at $5,000/month? The answer depends on market conditions, your risk tolerance, and the specific return sequence. This simulator lets you explore all three scenarios.

⬡ What Research Says

Vanguard research found that in roughly 68% of historical 12-month windows, lump sum investing outperformed DCA — simply because markets rise more often than they fall. But in bear markets and volatile sideways periods, DCA often wins decisively. Context is everything.

Strategy A

Dollar-Cost Averaging

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Strategy B

Lump Sum

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Comparison

Head-to-Head Stats

DCA LUMP SUM

Final Value

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Total Return

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CAGR (annualized)

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Max Drawdown

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Months DCA Ahead

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Final Share Price

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Difference

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