Dollar-cost averaging
Compare investing a lump sum today with spreading the same money over several months, using made-up price paths.
Gradual versus all at once, after 3 years
+£2,740
Spreading the money over 1 year ended £2,740 (21.1%) ahead of investing it all on day one in this scenario.
Invest all now£12,960
Invest gradually£15,700
Average price paid, gradual82.5
Price paid, all now100.0
Invest all nowInvest gradually
Show as a table
| Time | Price index | Invest all now | Invest gradually |
|---|---|---|---|
| Start | 100.0 | £12,000 | £12,000 |
| 3m | 91.1 | £10,933 | £11,819 |
| 6m | 82.2 | £9,867 | £11,344 |
| 9m | 73.3 | £8,800 | £10,545 |
| 1y | 69.8 | £8,373 | £10,144 |
| 1y 3m | 74.2 | £8,907 | £10,790 |
| 1y 6m | 78.7 | £9,440 | £11,436 |
| 1y 9m | 83.1 | £9,973 | £12,082 |
| 2y | 88.0 | £10,560 | £12,792 |
| 2y 3m | 93.0 | £11,160 | £13,519 |
| 2y 6m | 98.0 | £11,760 | £14,246 |
| 2y 9m | 103.0 | £12,360 | £14,973 |
| 3y | 108.0 | £12,960 | £15,700 |
- The price paths are invented to show how timing works. They are not historical data.
- Gradual investing buys an equal amount at the start of each month. Money waiting to be invested earns nothing.
- There are no dealing costs or taxes. Past patterns do not predict what a real market will do.