Dollar Cost Average Investment Calculator

*Earliest Date is 01/01/1991

Frequently Asked Questions

Dollar cost averaging is an investment strategy whereby the investor contributes a fixed amount of cash into his portfolio and purchases shares in an asset at fixed times. As the stock market increases in value over time over the long term this strategy tends to be profitable over the long term. This calculator simulates the outcome of this strategy over a specified time periods and fix contribution amount and interval for a given U.S. equity.

The user specifies a fixed contribution and contribution interval, on those days the total cash in the account is used to purchase as many shares of the stock as possible. The stock price is corrected for historical splits and mergers and dividends so as to reflect the true purchasing power of money at the point in time. Any dividends are paid as cash into the account and used to purchase additional shares.

This is the withholding tax that dividends are charged on. Any dividend paid out to the cash balance of the account is sans this percentage rate. For a tax sheltered portfolio the user can set the rate to 0%.

For an investment to be a net gain, it must over time at least preserve the purchasing power of the dollars spent. $1 contributed 30 years ago had a different purchasing power compared to $1 contributed today, each dollar contributed to the strategy is weighted by the U.S. overall CPI index and corrected to its real value in the present day. An investment may generate a positive return in nominal terms yet still be in the negative when measured against real, inflation corrected dollars.

The underlying model requires sufficient volume in order to execute a trade. A stock with low volume can't be purchased in a single batch without affecting the underlying price so the model will either wait for a day with sufficient volume or distribute the trade over several days and incur more commission.


kw at ownmail dot net | Github | CV

I started off in academia as a high-energy physicists - continued life as a data scientist by trade.

After spending ~6 years in the corporate world applying machine learning and statistical analysis to business problems, I decided to strike out on my own and try to pursue a living in my hobbies in computer game development and stock investing. Meanwhile, the bills get paid with IT consulting projects.

The dollar-cost average investment calculator started off as a personal investment analysis tool that I built, as I could never find an example on the internet that accurately accounted for the nuances of stock investment, taxes, commission, inflation - so I developed my own.

Feel to free to contact me if you are interested in consulting opportunities or just want to learn more about the website.

- Kuhan