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DCA Calculator (Dollar-Cost Averaging Backtest)
Dollar-cost averaging means buying a fixed dollar amount every month regardless of price. The point: smooth out volatility, avoid timing the market. This calculator backtests DCA against real historical monthly closing prices — pick any asset, any time window, any monthly amount, and see exactly what you would have ended up with.
How the DCA Backtest Calculator Works
How DCA backtesting works
For every month in your selected window, we apply your monthly contribution at that month's real closing price. We track shares accumulated, total invested, and current value at each step. The result is your actual end balance plus the total return you would have realised — no assumptions, just historical data.
Why DCA can outperform lump-sum in volatile assets
When prices are choppy, you buy more shares when prices are low and fewer when they are high. That lowers your average cost basis. In sustained bull markets, lump-sum tends to win because the early money compounds longest. DCA shines in volatile assets like crypto and individual stocks; lump-sum wins more often in broad indices.
Frequently Asked Questions
Where does the historical data come from?
Yahoo Finance — monthly closing prices for the asset over your selected window. The same data source used by professional analysts.
Does this account for fees?
No. Most retail brokers (Trading 212, Robinhood, IBKR Lite) are zero-commission for stocks and ETFs now, so the impact is minor. If your broker charges fees, subtract roughly 0.1–1% from the projected return depending on volume.
What about taxes?
Not in this calculator — see our Capital Gains Tax calculator for that. Tax depends on jurisdiction, account type (taxable vs. ISA/Roth/SIPP), holding period, and asset class.
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