What it shows: on a 10-year horizon, the final value of three approaches — lump sum, dollar-cost averaging, and dip-timing with adjustable skill — so you can see the real trade-off between expected return and regret/risk.
The price path is simulated and calibrated to realistic statistics. Illustrative — not a backtest of a specific market, and not investment advice. (Uninvested cash is assumed to earn 0% for simplicity.)
Set the plan
You have a sum to invest over a 10-year horizon. Compare putting it in all at once, spreading it out, or trying to time the dips — and set how much real timing skill you actually have.
0% = buy on schedule · 100% = magically buy at the lowest prices (nobody can)
DCA came out ahead this time
Over 10 years, investing $12,000 as a lump sum finished at $47,773; spread over 12 months it reached $50,868; and with 30% timing skill, $52,563. In a market that drifts upward, lump-sum usually wins because the money is working for longer — DCA spends part of the period in cash. Your timing skill was enough to edge lump-sum here — but that level of skill is the hard part. DCA's real value isn't a bigger number; it's smaller regret if the market drops right after you commit.
Final value, three ways
Reading this
Lump-sum usually wins on average because markets rise more often than they fall — so time in the market beats waiting. DCA isn't about returns; it's a behavioural tool that lowers the risk of bad luck and the regret of investing right before a drop. “Timing” only wins with skill you can repeat — which the cost-of-missing-the-best-days tool shows is brutally hard. Full discussion in Dollar-cost averaging vs market timing.
Frequently asked
- Is lump-sum or dollar-cost averaging better?
- On average and over long horizons, investing a lump sum tends to beat dollar-cost averaging, because markets rise more often than they fall, so getting the money invested sooner means more time compounding. Studies (e.g. from Vanguard) put lump-sum ahead roughly two-thirds of the time. DCA wins in the cases where the market falls right after you invest.
- So why would anyone use DCA?
- Because the best-on-average choice is not always the best choice for a real person. DCA reduces the risk and the regret of investing a large sum right before a drop, and it matches how most people actually receive money — a bit each payday. It is a behavioural and risk-management tool, not a return-maximising one.
- Can timing the dips beat both?
- Only with genuine, repeatable skill — which is very rare. The skill slider lets you see it: at 0% you simply buy on schedule; at 100% you magically buy the lowest prices, which nobody can. In between, modest skill rarely overcomes the head start that lump-sum investing gets from being in the market sooner.
- Is this real data or advice?
- The price path is simulated and calibrated to realistic statistics — illustrative, not a backtest of a specific market. Nothing here is investment advice.