Dollar Cost Averaging Calculator
Calculate average cost per share for DCA investing from purchases at different prices.
Returns total shares, average price, and portfolio value vs lump sum.
Dollar-cost averaging (DCA) is an investment strategy where a fixed dollar amount is invested at regular intervals — weekly, monthly, or quarterly — regardless of the asset’s current price. This approach automatically purchases more shares when prices are low and fewer shares when prices are high.
Core DCA formulas:
Shares Purchased per Period = Fixed Investment Amount ÷ Price per Share
Total Shares = Sum of all shares purchased across all periods
Average Cost per Share = Total Invested ÷ Total Shares
Unrealized Gain/Loss = (Current Price − Average Cost) × Total Shares
The mathematical advantage — a worked example: An investor puts $500/month into a stock over 6 months:
| Month | Price | Shares Bought |
|---|---|---|
| Jan | $50.00 | 10.00 |
| Feb | $40.00 | 12.50 |
| Mar | $35.00 | 14.29 |
| Apr | $45.00 | 11.11 |
| May | $55.00 | 9.09 |
| Jun | $50.00 | 10.00 |
| Total | — | 66.99 shares |
- Total invested: $3,000
- Average cost per share: $3,000 ÷ 66.99 = $44.78
- Average market price over the 6 months: ($50+$40+$35+$45+$55+$50) ÷ 6 = $45.83
- DCA average cost ($44.78) is lower than the simple price average ($45.83) — this is the core benefit
DCA vs. lump-sum investing:
- Lump sum outperforms DCA about two-thirds of the time in rising markets (per Vanguard research)
- DCA reduces regret risk and protects against investing everything at a market peak
- DCA is particularly valuable for investors who receive income periodically (paycheck investing)
DCA limitations:
- In strongly trending bull markets, waiting to invest incrementally sacrifices return
- Transaction costs (if any) multiply with each periodic purchase
- Does not protect against a sustained long-term decline