DCA calculator: what monthly investing would have returned
Pick an ETF or a lazy portfolio, how much to invest each month and for how long. The calculator uses real monthly returns with dividends reinvested, compares the plan with investing the same total at the start, and shows how it would have gone from every other start month.
Not enough history for this choice.
Returns in US dollars with dividends reinvested; the fund’s own costs are already included. Taxes and trading costs are not. Historical simulation for education: not a forecast and not investment advice.
How to read the result
Total invested is the initial amount plus every monthly contribution. Final value is what the plan would have been worth at the end of the period, before taxes.
The orange line invests the same total in a single payment on the first month. When markets rise over the period it usually ends higher, because the money is invested for longer; when the first months are followed by a fall, the monthly plan comes out ahead.
The start-month box repeats the same plan for every start date in the data. It is the most honest way to see how much timing matters, for better and for worse.
Questions
What is dollar-cost averaging (DCA)?
Dollar-cost averaging means investing a fixed amount at regular intervals, usually every month, instead of investing a sum all at once. You buy more shares when prices are low and fewer when they are high, and the position builds up from savings over time.
Is DCA better than investing a lump sum?
In markets that rose over the long run, investing a sum you already have all at once ended higher in most historical periods, because the money spent more time invested. DCA reduces the risk of putting everything in just before a fall, and for most people investing part of their salary each month it is simply how investing happens. The calculator shows both for the fund and dates you choose.
What is the "annual return of the plan"?
It is the money-weighted return (internal rate of return) of your contributions: each monthly amount is counted for the time it was actually invested. It differs from the fund’s own annual return, which assumes all the money was invested on the first day.
Which returns does the calculator use?
Real monthly total returns of each ETF with dividends reinvested, computed from end-of-day prices, or of each lazy portfolio rebalanced once a year. The fund’s own ongoing charges are already in its returns; you can add an extra yearly fee for an advisor or platform. Taxes and trading costs are not included.
Does past performance tell me what DCA will return in future?
No. The historical results show how wide the range of outcomes was depending on when you started, which is useful for setting expectations, but they are not a forecast.
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Source: MarketStack end-of-day prices, total return with dividends reinvested. Figures are historical and descriptive; they are not forecasts and not investment advice. MEDGE Capital does not recommend buying or selling any instrument. Risk disclaimer.