Got a windfall? Investing it all at once usually beats spreading it out, but averaging in reduces regret. See the math.
Compares investing a windfall all at once against spreading it evenly over several months, using a steady expected return to show the difference in outcomes.
Because markets rise more often than they fall, putting money to work immediately gives it the most time to compound. Dollar-cost averaging keeps part of your cash on the sidelines longer, which historically lags a full immediate investment on average. This calculator applies a steady expected return to both approaches so you can see the typical gap. The result reflects averages, not any single market outcome.
Spreading purchases over months reduces the risk of investing everything right before a downturn, which can ease anxiety and prevent regret. If markets happen to fall during the averaging window, you buy more shares at lower prices. The trade-off is giving up some expected return for lower timing risk. A steady-return model cannot show volatility, so treat this as a simplified illustration and not financial advice.
Markets trend upward over time, so investing fully at the start captures more growth on average than holding cash and investing gradually. The advantage grows with longer horizons and higher expected returns.
Averaging in tends to win when markets decline during the investment window, and it lowers the emotional risk of a poorly timed lump sum. It trades some expected return for peace of mind.
No, it assumes a smooth, steady return and cannot capture real volatility. Actual results depend on how markets move during your specific window.
See the exact formula and a worked example on our methodology page.