Simulate dollar-cost averaging strategy and compare DCA vs lump sum returns. Enter investment amount, frequency, and expected annual return.
DCA (Dollar Cost Averaging) means investing a fixed amount regularly regardless of market conditions. It smooths out purchase prices and reduces timing risk over the long term.
Lump sum tends to outperform in bull markets; DCA reduces risk in volatile/bear markets. DCA is generally more robust for most investors.
Monthly is most common. More frequent DCA (weekly) provides slightly better averaging but the difference is usually marginal. Consistency matters most.
Stock funds: ~8-12% long-term; bonds: ~4-6%; money market: ~2-3%. Be conservative in your estimates.