An inheritance, a bonus, years of savings finally ready to invest — and one paralysing question: put it all in today, or drip it in monthly? This simulator shows both paths side by side: the expected value of each after your chosen window, an honest ±1σ range around each, and the expected cost of waiting — what dollar-cost averaging typically gives up in exchange for a calmer ride. No dogma, just the trade-off in euros.
By Kestutis Balciunas · Last reviewed: 17 July 2026 · Figures and rules are 2026-vintage estimates — verify current data before acting. Educational tool, not advice.
How the simulator works
The lump-sum path is simple: the full amount A compounds for the whole window, A × (1+r)m/12 after m months at expected annual return r. The DCA path invests A/m at the start of each month while the rest waits in cash at 0%; the tranche invested in month k grows (1+r)(m−k)/12, and the tool sums all m tranches exactly. Worked example: €12,000 over 12 months at 7% expected return — lump sum ends at €12,840, DCA at roughly €12,450. The €390 difference is the expected cost of waiting: about 3.2% of the amount deployed, or half of that on average since an average euro waited half the window.
The honest part: expectation vs regret
Because markets rise more often than they fall, lump sum beats DCA roughly two times out of three historically — Vanguard has found this across the US, UK and European markets. On expectation, waiting costs money. So why does almost every adviser still sometimes recommend spreading it out? Because the third time, the one where the market drops right after you invest, is the one that breaks investors. The ±1σ bands in the tool make this visible: the DCA range is markedly narrower, since the average euro spends only about half the window in the market. DCA is insurance against being the person who went all-in the week before a crash — and the expected gap is the premium. As we argue in lump sum vs DCA for a €100k inheritance, the deciding factor is not maths but the answer to one question: if your portfolio dropped 30% next month, would you sell? If yes, DCA — the best plan is the one you will actually hold through.
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Making either path work in practice
Whichever you choose, decide the schedule in advance and automate it — the failure mode is not picking DCA, it is stopping the plan after two red months, a pattern we unpack in investing €100k from savings. Keep the waiting cash productive: the tool assumes 0% for honesty, but a money-market ETF earning near the ECB rate meaningfully shrinks DCA’s real cost while the tranches deploy. For smaller windfalls the same logic applies at lower stakes — our €10k year-end bonus playbook walks through it. And note the asymmetry of timing risk around retirement: a crash early in a long accumulation career is a buying opportunity, but the same crash matters enormously near the end — that is sequence-of-returns risk, and it is a reason older investors reasonably lean more towards spreading large sums.
What the ranges are — and are not
The bands scale your chosen volatility by the square root of time actually spent in the market (√(m/12) for lump sum, √((m+1)/24) for DCA) and show ±1 standard deviation around each expected value. That is an illustration of relative riskiness, not a Monte Carlo simulation: real outcomes land outside such bands roughly one year in three, returns are not normally distributed, and crashes are fatter-tailed than any σ suggests. Assumptions to verify for yourself: your expected return, your volatility pick, and that taxes and fees (ignored here) don’t change your ranking. Not financial advice.
These numbers make more sense with the guide
The free 12-page Starter Kit turns them into decisions: your first fund, a safe broker, and the tax basics for your country.
Frequently asked questions
Q: Does lump sum really beat DCA two-thirds of the time?
A: Across long historical samples of US, UK and European markets, investing immediately has beaten a 6-12 month spread roughly 65-70% of the time, because markets rise in most periods. The catch is the other third: DCA loses on average but wins precisely in the scenarios that feel worst — investing right before a fall.
Q: What is the best DCA period — 3, 6, 12 or 24 months?
A: Shorter is better on expectation: every extra month of spreading keeps more money out of the market. Most evidence-based guidance lands on 3-12 months as the sweet spot where the psychological benefit is real but the expected cost stays small. 24 months is hard to justify unless the alternative is not investing at all.
Q: Should the waiting cash really sit at 0%?
A: The tool assumes 0% to keep the comparison honest and conservative, but in practice you should park undeployed tranches in an instant-access account or money-market fund earning close to the central-bank rate. That income offsets part of DCA’s expected cost — it rarely eliminates it.
Q: Is this a Monte Carlo simulation?
A: No. The expected values are exact given your return assumption, and the ranges are a ±1 standard deviation illustration scaled by time in market. A Monte Carlo would draw thousands of random paths and show percentiles; this tool deliberately stays simpler and labels its bands as illustrative.
Q: Does this apply to my regular monthly investing too?
A: Not really — investing your salary surplus each month as it arrives is not a DCA decision, it is simply investing money when you get it. The lump-sum question only exists when you already hold a pile of cash. For ongoing monthly investing, the right comparison is invested vs not invested.