Dollar Cost Averaging, also known as DCA, is an investment strategy that tries to minimize the risk of overpaying for any asset by dividing the invested capital into same small amounts and periodically investing that amount into an asset over time instead of one lump sum investment.
DCA works by investing the investment amount across multiple buys. This results in buying less shares when the price is expensive and buy more shares when it's cheaper. This reduces the risk of investing the whole amount at a bad time (i.e. just before market crash).
In the investment journey, having a tool that can help you visualize your goal clearly and work toward your financial goal with more clarity is invaluable. Portseido's Free Online DCA Calculator is a tool that empowers individuals to plan and grow their portfolios.
This is the duration over which you plan to invest. Input the desired number of years.
Enter the starting amount to invest. This provides the baseline for your future projections.
Specify the anticipated annual return on your investments. This figure helps the calculator estimate the growth of your portfolio over time.
Input any additional funds you plan to contribute regularly. You can choose the frequency, whether monthly or annually, depending on your financial habits.
Define the growth rate for your additional contributions. This feature allows you to account for salary increases, bonuses, or other financial increments. Choose whether this growth occurs year over year or month over month.
Once you've entered all the necessary information, click on the "Calculate" button. The DCA Calculator will process your inputs and generate a outputs to guide your financial planning.
The calculator will display the projected final amount. This represents the target amount you aim to achieve within the specified time horizon.
Visualize your portfolio's projected growth over time with an easy-to-understand graph. This graphical representation provides a quick overview of your financial trajectory.
Explore a detailed table that breaks down your portfolio progression over the specified time horizon. The table includes multiple tabs for "Value," "Contribution," and "Return," allowing you to analyze each aspect of your financial plan.
