How much is at stake, not just how often
—
The range of outcomes
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 |
|---|
—
What the numbers show
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 what each field and each result means.
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.
How many months you'd split the entry into if you go with DCA.
The horizon over which the final result is measured. The book's statistic uses 12 months; stretching it out widens the dollar difference but barely changes how often each strategy wins.
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.
In how many of the simulated scenarios investing it all at once ends up with more money at the end of the chosen horizon.
The complement: in how many scenarios it would have been better to spread out the entry.
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 use 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.
- Set the comparison horizon. How many months out you measure the result. The longer it is, the less it matters how you entered.
- 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.
Frequently asked questions about this calculator
Why doesn't the result change much if I extend the horizon?
Because 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.