OneTaskBy Tim King · Updated
Dollar Cost Averaging Calculator vs Lump Sum
Average Cost Per Share From Regular Buys, Compared With a Lump Sum
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How the Dollar Cost Averaging Calculator works
This dollar cost averaging calculator shows what happens when you invest the same amount at regular intervals. Enter the amount per purchase and the price each time, and it works out the shares bought, the average cost per share, the value at the last price and how it compares with a single lump sum.
Dollar cost averaging calculator formula
A fixed amount buys more shares when the price is low and fewer when it is high. The dollar cost averaging calculator uses:
Shares each time = (amount − fee) ÷ price
Average cost = total invested ÷ total shares
The average cost is the harmonic mean of the prices, which is always at or below their simple average. The lump sum comparison invests the same total at the first price.
Worked example: a dip and recovery
Invest 500 five times at 50, 40, 25, 40 and 50. You buy 65 shares for 2,500, an average cost of 38.46. At 50 they are worth 3,250, a profit of 750 or 30%. The same 2,500 invested at the first price of 50 would still be worth 2,500.
Worked example: a steady rise
At prices rising from 50 to 70 the average cost is 59.16 and the holding is worth 2,958.16, while a lump sum at 50 would be worth 3,500. In a rising market investing early wins. The table shows how many shares each amount buys at each price.
Dollar cost averaging reference table
Shares bought with 500 and with 1,000 at prices from 10 to 130.
| Price | Shares for 500 | Shares for 1,000 |
|---|---|---|
| 10.00 | 50.0000 | 100.0000 |
| 15.00 | 33.3333 | 66.6667 |
| 20.00 | 25.0000 | 50.0000 |
| 25.00 | 20.0000 | 40.0000 |
| 30.00 | 16.6667 | 33.3333 |
| 35.00 | 14.2857 | 28.5714 |
| 40.00 | 12.5000 | 25.0000 |
| 45.00 | 11.1111 | 22.2222 |
| 50.00 | 10.0000 | 20.0000 |
| 55.00 | 9.0909 | 18.1818 |
| 60.00 | 8.3333 | 16.6667 |
| 65.00 | 7.6923 | 15.3846 |
| 70.00 | 7.1429 | 14.2857 |
| 75.00 | 6.6667 | 13.3333 |
| 80.00 | 6.2500 | 12.5000 |
| 85.00 | 5.8824 | 11.7647 |
| 90.00 | 5.5556 | 11.1111 |
| 95.00 | 5.2632 | 10.5263 |
| 100.00 | 5.0000 | 10.0000 |
| 105.00 | 4.7619 | 9.5238 |
| 110.00 | 4.5455 | 9.0909 |
| 115.00 | 4.3478 | 8.6957 |
| 120.00 | 4.1667 | 8.3333 |
| 125.00 | 4.0000 | 8.0000 |
| 130.00 | 3.8462 | 7.6923 |
Quick answers
- Dollar cost averaging buys more shares when prices fall.
- The average cost is never above the simple average price.
- A lump sum tends to win when prices rise steadily.
- Fees per purchase matter more with small regular amounts.
- In the UK it is often called pound cost averaging.
FAQ
Is dollar cost averaging better than a lump sum?
Historically, markets have risen more often than they have fallen, so investing a lump sum straight away has usually done better. Dollar cost averaging reduces the regret of investing everything just before a fall and suits people investing from each pay packet.
Why is my average cost lower than the average price?
Because you buy more shares at low prices and fewer at high ones, the low prices carry more weight. The average cost per share works out as the harmonic mean of the prices, which is below the arithmetic mean unless every price is equal.
How should I enter the prices?
Type one price per purchase, separated by commas or new lines, in the order you bought. The last price is used as the current value. Add today's price as a final entry if it differs from your last purchase.
Does the fee include currency or platform charges?
Enter whatever is charged on each purchase, such as dealing or conversion fees. Yearly platform fees charged on the whole holding are not modelled; subtract them from the final value if they apply.
See also: all Investing tools, Pay, Bills, Property, Debt, Saving.
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