Understand the numbers
Dollar-cost averaging means investing a fixed amount on a recurring schedule instead of making one purchase. This calculator models a DCA scenario using your recurring contribution, purchase frequency, average purchase price, current price and estimated transaction fee.
Calculation method
The tool estimates the number of scheduled purchases, subtracts estimated purchase fees, converts the remaining contribution amount into holdings at the assumed average purchase price, then values those holdings at the current price you enter.
Example
Example: investing $100 per month for 12 months represents $1,200 of scheduled contributions before fees. The final holdings depend on the average purchase price assumed across those purchases.
Useful checks
- Use a conservative average purchase price when testing future scenarios.
- Remember that real DCA purchases occur at different prices.
- Compare several scenarios instead of relying on one forecast.