What is DCA (dollar-cost averaging) and why it works
DCA (dollar-cost averaging) means buying an asset for the same amount at regular intervals — daily, weekly or monthly — whatever the price.
How it works
Say you buy $100 every month. When the price is high you get fewer units; when it is low you get more. Over time your average purchase price ends up below the market's average price.
Real numbers: $10 a day for 5 years
| Asset | Invested | DCA · 5 years | Result | $1,000 5 years ago |
|---|---|---|---|---|
| Bitcoin | $18,410 | $27,439 | +49.0% | $1,131.41 |
| Nvidia | $18,410 | $67,566 | +267% | $5,005.73 |
| S&P 500 | $18,410 | $27,951 | +51.8% | $1,770.46 |
| Apple | $18,410 | $33,466 | +81.8% | $2,208.17 |
| Gold | $18,410 | $29,455 | +60.0% | $2,191.19 |
Pros of DCA
- No need to time the market.
- Less stress in crashes — you are buying cheaper.
- Easy to automate on an exchange or with a broker.
Cons of DCA
- In a market that only goes up, a lump sum at the start often wins.
- Fees on frequent small buys can eat into returns — choose low-fee platforms.
How to start
Pick an asset, an amount and a frequency, and check the historical result in the calculator. Then set up automatic buys on an exchange or with a broker.
Bitcoin BTC
Calculator →
DCA $10/day · 5 years: +49.0% · Price $64,540.40
S&P 500 SPY
Calculator →
DCA $10/day · 5 years: +51.8% · Price $754.37
Not investment advice.
