Dollar-cost averaging
See how investing on a schedule averages your cost across a bumpy price.
Dollar-cost averaging
Dollar-cost averaging means investing a fixed amount on a schedule, whatever the price. These price paths are invented shapes — not any real investment — to show how a schedule averages out your cost.
Invested
$4,800
Shares bought
54
Average cost / share
$88.61
Value, dollar-cost averaging
$6,500
Value, all invested up front
$5,760
When a price falls before it rises, spreading purchases out lowers your average cost. When a price only rises, investing sooner wins. Nobody knows in advance which path they’ll get — that’s the whole point.
This is a hypothetical illustration, not advice or a prediction. The numbers are made up to show how the math works — real returns vary and can be negative. See the full disclaimer.