What is dollar-cost averaging?

Dollar-cost averaging (DCA) means investing a fixed amount at regular intervals — say monthly — instead of all at once. You buy more units when prices are low and fewer when they're high, which smooths your average entry price. Most Australians already do it without thinking about it, through regular super contributions and automatic investments from each pay.

Is lump sum or dollar-cost averaging better?

Historically, investing a lump sum all at once has beaten dollar-cost averaging most of the time — roughly two times in three in long-run share market studies — because markets trend upward, so getting more money invested sooner usually wins. DCA's advantage isn't return; it's reducing timing risk and the regret of investing everything just before a fall. If spreading it out keeps you calm and invested, that's a fair trade-off.

Should I dollar-cost average into shares?

If you have money to invest now and a long time horizon, the maths usually favours investing it sooner rather than dripping it in. But if a market drop straight after a big lump-sum investment would rattle you into selling, dollar-cost averaging over six to twelve months is a sensible compromise. This calculator is general information only, not financial advice — consider your own goals or speak to a licensed adviser.

Dollar-Cost Averaging Calculator

Got a lump sum to invest? Compare putting it all in today against spreading it out month by month (dollar-cost averaging), and see which is likely to build more wealth over the long run. General guidance only.

Last verified: 5 May 2026

Invest it all now, or spread it out?

On the maths, a lump sum usually wins — markets trend up, so time in the market beats timing it, and a lump sum gets every dollar working sooner. Dollar-cost averaging trades a little expected return for less timing risk and less regret if the market dips right after you invest. It's also how most people invest via their pay.

Worked example. $50,000 invested today at 8% grows to about $107,900 over 10 years. Spread over 12 months instead, it ends near $103,800 — roughly $4,100 less, simply because the money spent less time invested. Change the inputs to see your own gap.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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Dollar-Cost Averaging Calculator

Invest it all now, or spread it out?

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