Dollar-Cost Averaging Calculator
Buying a fixed dollar amount at each price buys more units when the price is low, so your average cost lands below the simple average of the prices you paid. Enter four purchase prices to see the size of that effect.
Why the average lands below the midpoint
Fixed-dollar buying is self-adjusting: $500 at $100 buys 5 units, $500 at $50 buys 10. The cheap purchase contributes twice as many units to the average as the expensive one, so the average cost is pulled toward the low prices.
Mathematically your average cost is the harmonic mean of the prices, not the arithmetic mean, and the harmonic mean is always the smaller of the two whenever prices differ. In the default, four buys at $100, $80, $50 and $90 give a simple average of $80 and an actual average cost of about $74.61 — roughly 6.7% better, for no skill and no forecasting.
What that does and does not prove
It proves that fixed-dollar buying gets you a better average than fixed-unit buying across the same set of prices. That is a real, arithmetic advantage and it requires no forecasting ability at all.
It does not prove that DCA beats investing a lump sum. Those are different questions. Historically, in markets that rise more often than they fall, lump-sum investing wins most of the time simply because the money is exposed for longer. DCA's advantage is behavioural and risk-shaped: it removes the single-date timing decision, caps the damage of buying everything at a peak, and is far easier to actually stick to.
The gap widens with volatility
Set all four prices equal and the two averages match exactly — no volatility, no benefit. Spread them apart and the gap grows. This is why the technique is discussed most in crypto and least in bonds: the effect scales with how much prices move.
What it cannot do
DCA lowers your average cost relative to the prices you paid. It does not make a falling asset profitable. Averaging into something in a sustained decline produces a steadily lower average and a steadily larger loss, which is the same trap covered on the stock average calculator: a better average price on a bigger losing position is not risk reduction.
Why the boring version competes
Across 66,465 households from 1991 to 1996, the most active traders earned 11.4% a year against a 17.9% market, while the average household turned over 75% of its portfolio annually.[1] A schedule that removes the timing decision removes the variable that did the damage.
The number is the easy part
Everything above is arithmetic, and anyone opening this page gets the same answer. What no calculator can settle is whether you took the trade on these terms, or are describing — afterwards — the version of it that worked out.
That is what a trade recorder is for: the trade committed before it resolves, timestamped and sealed on the spot, on a Merkle-anchored log a stranger can check without kappi's cooperation. The plan you typed here stops being a plan you remember having. $15/month, no free tier.
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Frequently asked questions
How do I calculate my average cost when dollar-cost averaging?
Divide total dollars invested by total units acquired. Because fixed-dollar buys purchase more units at lower prices, that figure sits below the simple average of the prices.
Why is my DCA average lower than the average of the prices?
Fixed-dollar buying weights cheaper purchases more heavily in unit terms. The result is the harmonic mean of the prices, which is always below the arithmetic mean when prices vary.
Is DCA better than lump-sum investing?
Historically lump-sum wins more often, because the money is invested for longer in markets that rise more than they fall. DCA's advantages are removing timing risk and being easier to stick to.
Does DCA protect me from losses?
No. It improves your average entry across a set of prices but does not make a declining asset profitable. Averaging into a sustained downtrend increases the position and the loss together.