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The core philosophy of DCA is prioritizing 'Time in the Market' over 'Market Timing'. By investing a fixed amount on a schedule, you systemize your investing, removing emotional decisions. This maximizes the power of compound interest by keeping you consistently invested and growing your capital over the long term.
Not necessarily. In a consistently rising market, investing a lump sum early often yields higher returns statistically. However, most individuals do not have a large lump sum to start with. The true advantage of DCA is that it allows you to consistently increase your 'principal investment' starting with small amounts and naturally extend your 'time in the market'. This makes it the most practical and powerful strategy to maximize compound interest for long-term wealth building. Check out the performance difference between Lump Sum and DCA directly with this calculator!
We support backtesting for a wide range of global assets: • US Market Indices: S&P 500 (SPY), Nasdaq 100 (QQQ) • Dividend & Income: SCHD, VYM, JEPQ (Nasdaq Covered Call) • Sectors: Semiconductor (SOXX), Tech (XLK), Energy (XLE) • Global/Regional: All Country (ACWI), Europe (VGK), Germany (EWG), Japan (EWJ), South Korea (EWY), Taiwan (EWT), China (MCHI) • Commodities/Crypto: Gold (GLD), Silver (SLV), Bitcoin (BTC), Ethereum (ETH)
Nominal returns don't account for inflation. Real Return adjusts for the loss of purchasing power over time, showing you the true growth of your wealth in today's value.
If dividend reinvestment is selected, dividends are assumed to be reinvested immediately into the asset. This reflects the 'Total Return' including the compounding effect of reinvested income.
If you select a non-USD currency, we simulate converting your local currency to USD at the exchange rate of each investment date (monthly). The final value is converted back to your local currency, reflecting FX gains or losses.
No, the results are 'Pre-tax'. In reality, US dividends are typically subject to a 15% withholding tax at the source (depending on tax treaties). Additionally, capital gains taxes may apply in your country of residence when you sell. Please consider these tax implications for a more accurate net return.
It does not include transaction fees, taxes, or exact trade execution timing, which will cause differences from real-world brokerage accounts.
Yes, it is 100% free. You can use all features without any sign-up or login. Our goal is to empower everyone to test and verify their investment strategies easily.
Stock and ETF data is sourced from Yahoo Finance. Inflation (CPI) and Exchange Rate data are sourced from the Federal Reserve Economic Data (FRED). For more details, please visit the 'Data Sources' page.
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