Risk Warning: CFDs and forex trading involve significant risk of loss. Leveraged products can result in losses exceeding your deposit. This calculator is for educational purposes only and does not constitute financial advice.
Dollar-Cost Averaging (DCA) Calculator — Stocks
Model dollar-cost averaging into a stock. Calculate average cost per share, total invested, and final portfolio value with periodic investments over time.
Formula
DCA formula (geometric price model)
Period P Price
Initial Price × (1 + Growth Rate%)^(P−1)
Shares Bought
Periodic Investment ÷ Period P Price
Avg Cost
Total Invested ÷ Total Shares
Model limitation: Uses monotonic price growth. Real DCA advantage is highest in volatile markets — this model understates that benefit because it cannot simulate the effect of buying more shares during price dips.
Worked Example
Given
$500/month · 12 periods · Starting price $100 · Growth 1% per period
- Total Invested
- $500 × 12 = $6,000
- Period 1 — Shares
- $500 ÷ $100.00 = 5.0000
- Period 12 Price
- $100 × 1.01¹¹ ≈ $111.57
- Result
- Use calculator for exact shares and avg cost
Frequently Asked Questions
- What is dollar-cost averaging (DCA)?
- DCA is the practice of investing a fixed dollar amount at regular intervals regardless of price. When the price is low, your fixed investment buys more shares; when high, it buys fewer. Over time, your average cost per share is typically lower than the time-weighted average price, because you bought more shares at lower prices.
- What limitation does this model have?
- This calculator uses a geometric (monotonic) price progression each period — the price rises or falls at a constant rate. Real DCA's biggest advantage comes from price volatility: buying more shares when prices dip and fewer when they spike. This model shows average cost effects but understates DCA's advantage in volatile markets. For volatile assets, the actual DCA result is typically better than this model predicts.
- What period should I use — monthly or annual?
- Use whichever matches your contribution frequency. For monthly contributions, set periods to the number of months and use a monthly growth rate (annual rate ÷ 12 as an approximation). For annual contributions, set periods to years and use an annual growth rate. The formula is agnostic to the period length.
- What is a realistic price growth rate per period?
- For monthly investing in broad US equities, approximately 0.5%–0.8% per month (roughly 6%–10% annually). For individual stocks, volatility is higher — but since this model uses a fixed growth rate rather than actual volatility, results for individual stocks are approximations. Use this for asset classes where you have a long-run return expectation.