DCA Simulator
Model how an initial investment plus recurring monthly contributions could grow, assuming a constant annual return.
For informational purposes only — not investment advice. Assumes a constant annual return with no volatility, fees, or taxes, which is not realistic for actual markets.
Frequently Asked Questions
What is dollar-cost averaging (DCA)?
DCA means investing a fixed amount on a regular schedule (e.g. monthly) regardless of price, rather than investing a lump sum all at once. Because you buy more shares when prices are low and fewer when prices are high, it averages your purchase price over time and removes the need to time the market.
What return rate should I assume?
There is no way to know future returns. The historical long-run average for the US stock market (S&P 500, including dividends) is often cited around 7–10% annually before inflation, but any individual period can be much higher or lower. Try a range of assumptions rather than relying on a single number.
Does this simulation account for volatility?
No — it assumes a constant annual return compounded evenly, which smooths out the very volatility that makes DCA useful in practice. Real returns vary year to year; this tool is meant to illustrate the mechanics of compounding and recurring contributions, not to predict an actual outcome.