Introduction
Dollar-cost averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, no matter what the market is doing.1 Instead of trying to time the market with one big purchase, you spread your investments over time. This helps reduce the risk of buying at a peak price and smooths out the ups and downs of the market over the long run.
Our DCA Calculator helps you see how this strategy can grow your money over time. It offers two powerful modes. The Hypothetical Projection mode lets you set an expected return rate and investment period to forecast future portfolio growth. The Historical Backtest mode tests your DCA plan on real past prices for the S&P 500, Bitcoin, Ethereum, Solana, Cardano and Polkadot. You can set your initial lump sum, recurring contribution amount, contribution frequency, and even account for annual contribution increases or inflation. The calculator then shows your total portfolio value, investment gains, and a full year-by-year breakdown with interactive charts so you can clearly see how your wealth builds over time.
How to Use Our DCA Calculator
This dollar-cost averaging calculator lets you enter your investment details and see how your money can grow over time. It has two modes: Hypothetical Projection for future estimates and Historical Backtest to try DCA on real past prices for assets like the S&P 500 or Bitcoin.
Initial Investment (Lump Sum): Enter the amount of money you want to invest right at the start. This is a one-time deposit that begins working for you on day one. If you don't have a lump sum to invest, you can set this to zero.
Recurring Investment Amount: Enter how much money you plan to invest on a regular basis. This is the fixed amount you will add to your portfolio each time based on your chosen frequency.
Contribution Frequency: Choose how often you will add money to your investment. Options include daily, weekly, bi-weekly, monthly, or quarterly. Most people pick monthly since it lines up with a paycheck. In Historical Backtest mode the S&P 500 takes monthly or quarterly contributions, because its prices are monthly averages, and daily contributions to Bitcoin need a start date from 24 February 2022, when its daily prices begin.
Annual Contribution Increase: Enter a percentage if you plan to raise your contributions each year. For example, if you get a yearly raise at work and want to invest more over time, enter that percentage here. Leave it at zero if your contributions will stay the same, or enter a negative percentage to lower them each year.
Currency Display: Pick the currency you want the results shown in. You can choose from USD, EUR, GBP, CAD, AUD, or JPY. This changes the currency symbol shown throughout the calculator. Historical backtests are always in US dollars, the currency the prices are quoted in.
Annual Return Rate (Hypothetical Mode): Enter the yearly return you expect your investment to earn. For example, from 1928 through 2025 the S&P 500 including dividends returned 10.02% a year compounded before inflation, or 6.78% after inflation.4 This rate is used to project how your portfolio will grow.
Investment Period in Years (Hypothetical Mode): Enter the number of years you plan to keep investing. You can enter anywhere from 1 to 50 years. A longer time period lets compound growth do more of the heavy lifting.
Inflation Rate (Hypothetical Mode): Enter an estimated yearly inflation rate to see what your portfolio would be worth in today's dollars. This is optional. Set it to any rate other than zero to see an inflation-adjusted value alongside your regular results; a negative rate means prices fall.
Asset (Historical Backtest Mode): Choose the asset you want to test your DCA strategy against. Options include the S&P 500, Bitcoin, Ethereum, Solana, Cardano, and Polkadot. Each asset has its own date range: the S&P 500 from January 1871, Bitcoin from July 2010, and the other coins for the last 365 days.
Start Date and End Date (Historical Backtest Mode): Select the month and year for when your backtest begins and ends. The calculator buys at the real prices of your chosen asset during this time range to show how your DCA plan would have played out. For the S&P 500 each purchase uses that month's average price; for the coins, the first price on or after each contribution date.
Adjust Contributions for Inflation via CPI (Historical Backtest Mode): Turn this toggle on if you want your recurring contributions to grow with inflation over time. This raises each contribution in line with the U.S. Consumer Price Index, month by month, so it keeps up with rising costs, in place of the annual contribution increase, and adds a CPI-adjusted value in your start month's dollars. The inflation adjustment uses the Consumer Price Index for All Urban Consumers (CPI-U) from the U.S. Bureau of Labor Statistics.7 Before 1913, when the CPI-U begins, it uses the price index Robert Shiller splices to it. It works for any asset, for backtests that end by the latest month the CPI has been published.
Reinvest Dividends (Historical Backtest Mode, S&P 500): Turn this on to reinvest the index's dividends each month, at one twelfth of the annual dividend. Dividends are published a few months after prices, so the end date can be no later than the last month with a dividend.
What Is Dollar-Cost Averaging (DCA)?
Dollar-cost averaging, or DCA, is an investment strategy where you invest a fixed amount of money at regular intervals, no matter what the price of the asset is at the time.1 Instead of trying to time the market by buying low and selling high, you spread your purchases out over weeks, months, or years. This means you buy more shares when prices are low and fewer shares when prices are high.1 Over time, that can lower your average cost per share.
Why Do People Use DCA?
The biggest reason people use dollar-cost averaging is that it removes emotion from investing. Markets go up and down, and it can be scary to invest a large sum of money all at once. DCA means you don't have to guess when to invest. By sticking to a schedule (say, investing $500 every month), you build a habit of consistent investing. Over long periods, this disciplined approach has historically helped investors grow their wealth even through market downturns, recessions, and periods of high volatility.
DCA vs. Lump Sum Investing
Vanguard found that investing a lump sum all at once beat cost averaging two-thirds of the time in historical and simulated market data.5 That is because markets generally go up over time. However, DCA offers important psychological benefits. If you invest a lump sum right before a market crash, the short-term losses can feel devastating and may cause you to panic sell. With DCA, a market drop actually works in your favor because your next scheduled investment buys more shares at a lower price. For most people who earn a paycheck and invest a portion of it regularly, DCA happens naturally through retirement accounts like a 401(k).
How This Calculator Works
This calculator offers two modes. The Hypothetical Projection mode lets you set an expected annual return rate, choose how long you plan to invest, and see how your portfolio could grow over time. You can also factor in inflation to understand what your future money might be worth in today's dollars. The Historical Backtest mode uses real past prices, so you can see how a DCA strategy would have played out over a specific time period. The S&P 500 choice uses Robert Shiller's long-run stock market data. Its prices are the S&P Composite index's monthly averages of daily closing prices, with dividends, from Shiller's data starting in 1871.6 Bitcoin prices come from mempool.space's historical price data.8 Ethereum, Solana, Cardano and Polkadot prices come from CoinGecko's historical chart data, which is daily at 00:00 UTC for ranges above 90 days.9
Key Inputs Explained
- Initial Investment: A one-time lump sum you invest at the very start. This can be zero if you only want to make recurring contributions.
- Recurring Investment Amount: The fixed dollar amount you invest each period (daily, weekly, bi-weekly, monthly, or quarterly).
- Annual Contribution Increase: This lets you raise your contribution each year by a percentage, which is useful if you expect your income to grow over time. A negative percentage lowers it each year instead.
- Annual Return Rate: The average yearly growth rate you expect from your investments. From 1928 through 2025 the S&P 500 including dividends returned 10.02% a year compounded before inflation.4
- Inflation Rate: When set to any rate other than zero, the calculator shows what your portfolio would be worth in today's purchasing power, giving you a more realistic picture of your future wealth.
The Power of Compound Growth
The real magic behind DCA is compound growth. When your investments earn returns, those returns start earning their own returns.2 Over 10, 20, or 30 years, this snowball effect can turn modest regular contributions into a surprisingly large portfolio. The year-by-year breakdown table and charts in this calculator show exactly how compounding accelerates your gains the longer you stay invested. The earlier you start and the more consistent you are, the more powerful this effect becomes.