Execute Numbers versus nerves

Lump Sum vs. Dollar-Cost Averaging

You've got a lump sum saved up — an inheritance, the sale of something, years of saving — and the question everyone asks: invest it all today, or spread it in over time so you don't have to nail the timing? This isn't a matter of opinion — it's thousands of simulated scenarios.

Lump sum

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of scenarios it ends up ahead

DCA (spread out)

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of scenarios it ends up ahead

Median advantage of lump sum

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Median value · lump sum

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Median value · DCA

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In the worst 5% of scenarios, lump sum costs you

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How much is at stake, not just how often

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The range of outcomes

Scenarios where lump sum wins Scenarios where DCA wins

Each bar groups scenarios by the difference between the two strategies. The vertical black line marks the tie — lump sum wins to its right.

Scenario	Lump sum	DCA	Difference

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What the numbers show

The statistics are clear: because stock markets rise more often than they fall, investing a lump sum beats DCA roughly 67% of the time at a one-year horizon. But psychology votes too: spreading out your entry reduces the regret of bad timing and, above all, helps you actually start. Both approaches are legitimate — the best one is whichever lets you sleep at night, and, non-negotiably, actually getting started.

And a distinction that often gets confused: all of this applies to a lump sum you already have sitting idle. For monthly savings the debate doesn't even exist — an automatic contribution as soon as you get paid is DCA by nature, and there's nothing to decide. If what you want is to see that monthly contribution grow over time, use the compound interest calculator.

The only forbidden move is waiting. The cost of "buying it cheaper later" is hypothetical; the cost of staying out of the market is real and measurable. If your fear is investing right before a downturn, remember markets have recovered from every past crisis using much the same script — having a written investment plan in advance is the best protection against second-guessing yourself.

What each figure means

A quick look at every input and every result.

The amount you have

The capital you've already saved and want to invest — not a future recurring contribution, which is already resolved by the natural DCA of monthly saving.

Spread over

How many months you'd split the entry into if you go with DCA.

Cash on the sidelines earns

While DCA hasn't yet deployed all the capital, the pending portion isn't sitting under the mattress: it earns this rate (a high-yield savings or money market account), the same idea as in the compound interest calculator but applied only to the slice still waiting its turn.

Lump sum · times ahead

In how many of the simulated scenarios investing it all at once ends up with more money at the one-year mark.

DCA · times ahead

The complement: in how many scenarios it would have been better to spread out the entry.

Worst 5% of scenarios

The most lump sum can cost you if you land in one of the worst-case scenarios — the price of the bet when it goes wrong.

How to fill in this calculator

Frequently asked questions about this calculator

Steps for deciding how to enter (expand)

Enter the amount you have today to invest. This calculator is for money already in your account, not future contributions.
Choose how many months you'd spread it over. That's the alternative being compared against investing it all at once.
Adjust return and volatility. Volatility is what really decides this: if it's low, waiting barely helps; if it's high, spreading out cushions more.
Enter what the money earns while it waits. Spreading out the entry only pays off if the pending cash isn't sitting idle. At 0% the wait costs quite a bit more.
Read the conclusion as conditional, not as a rule. The result flips depending on volatility and on what the waiting cash earns — that's exactly the point it illustrates.

Why compare at a one-year horizon?

Because it is the horizon of the book's statistic (around 67%). Stretching it widens the dollar difference but barely changes how often each strategy wins: once both paths are fully invested, they both grow by multiplying against the same market. The outcome is decided in the few months when one strategy is fully invested and the other isn't yet — the rest of the time doesn't add any difference, it just makes it bigger in dollar terms.

Why does the simulation use a "fixed seed"?

So the results are reproducible: without it, every time you moved a slider you'd see slightly different numbers even though nothing meaningful had changed, which would make it hard to compare one assumption against another.

Why does lump sum win less often as volatility rises?

Because with more uncertainty, the exact timing of entry matters more, and spreading it out reduces that exposure to a single moment. The advantage of investing a lump sum is, essentially, the premium the market pays over cash sitting on the sidelines: the narrower that premium gets, the closer the result moves to 50%.

Does this include fees or taxes?

No — this isolates the pure effect of entry timing. For the cost of fees, use the fee impact calculator; capital gains tax is not modeled here.