Question 1

What is Dollar Cost Averaging (DCA)?

Accepted Answer

Dollar Cost Averaging is an investment strategy where you invest a fixed amount of money at regular intervals (daily, weekly, monthly, etc.) regardless of the asset's price. This approach helps reduce the impact of volatility and eliminates the need to time the market.

Question 2

Is DCA better than Lump Sum investing?

Accepted Answer

It depends on market conditions and timing. DCA can help reduce risk by spreading investments over time, but lump sum investing may perform better in consistently rising markets. Our simulator helps you compare both strategies using historical data for any stock.

Question 3

How does the simulator work?

Accepted Answer

The simulator uses real historical stock price data to calculate what would have happened if you invested using DCA versus a lump sum strategy. You can choose the investment frequency, day of the week, total budget, and time period to see which strategy would have performed better.

Question 4

What investment frequencies are supported?

Accepted Answer

You can simulate DCA strategies with daily, weekly, monthly, quarterly, or yearly investment frequencies. For weekly investments, you can also choose which day of the week to invest.

DCA Simulator

What is Dollar Cost Averaging (DCA)?

Is DCA better than Lump Sum investing?

How does the simulator work?

What investment frequencies are supported?