Lump Sum vs DCA Calculator
Got a sum to invest? Compare putting it all in at once with spreading it over a few months, using real monthly prices, and see how often each choice won in the past.
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S&P 500: how often lump sum won
Every 10-year period of SPY (dividends reinvested), one per start month, with the waiting cash earning nothing.
| DCA spread over | Lump sum won | Average lump sum edge | Periods |
|---|---|---|---|
| 6 months | 71% | 1.9% | 286 |
| 12 months | 78% | 4.3% | 286 |
| 24 months | 80% | 9.3% | 286 |
Frequently Asked Questions
Is lump sum investing better than dollar-cost averaging?
Usually, but not always. Across all 286 ten-year periods of the S&P 500 starting Feb 1993 to Nov 2016 (SPY, dividends reinvested), investing everything at once beat spreading it over 12 months 78% of the time, ending 4.3% ahead on average. Markets rise more often than they fall, so money invested sooner usually has more time to grow. Vanguard's 2012 study of U.S., U.K. and Australian markets, which used a mix of stocks and bonds, also found lump sum ahead most of the time: about two-thirds.
When does dollar-cost averaging beat a lump sum?
When prices fall while you are still spreading the money in, so the later purchases buy cheaper shares. In the S&P 500 data, the best start for a 12-month DCA over a lump sum was Jun 2008, when the lump sum ended 28.5% behind after ten years. The best start for the lump sum was Mar 2009, 30.8% ahead. Nobody can tell in advance which kind of year is coming.
Why would anyone choose DCA if lump sum usually wins?
Because the cost of being unlucky feels larger than the reward of being lucky. Putting a large sum in the day before a 30% fall is hard to live with, and people who panic and sell lose far more than the small average edge of investing at once. Spreading the money over a few months limits that regret. If it is what gets you invested at all, DCA is a good choice.
How does this calculator work?
Both strategies start with the same amount in the same month and are valued at the same end month, using real monthly closing prices from Yahoo Finance. The lump sum is invested at the start of the first month. DCA invests an equal part at the start of each month until the money is all in; the cash that is still waiting can earn the interest rate you set, and that interest is invested too. By default prices are dividend-adjusted (total return). "How often lump sum won" repeats the same comparison for every start month in the asset's history, with the same period length.
Investing a fixed amount every month from your income is a different question; see the DCA calculator for that, all calculators, and our Methodology page for how the figures are calculated. For education only, not investment advice. Past performance does not guarantee future results.