Should I invest it all now or spread it out?
Vanguard's research found lump sum beats DCA roughly 67% of the time. We let you run thousands of Monte Carlo scenarios to see the win rate at your specific time horizon.
How to decide in 60 seconds
- Enter your windfall amount and horizon — bonus, inheritance, sale proceeds. Horizon is how long the money will stay invested (5–30 years for typical retirement decisions).
- Look at the win-rate number, not the expected value — across 5,000 paths, lump sum wins ~67% of the time. That tells you the probability, not the magnitude.
- Then look at the worst-5% bucket — DCA's value isn't expected return, it's protection in the bad scenarios. Ask yourself: in the disaster path, would I stay invested or panic-sell?
Quick rule: if you've held through a real 30%+ drawdown without selling, lump sum is the higher-EV choice. If you've never been tested, DCA is the safer error.
How the simulation works
Two paths, simulated against thousands of synthetic market trajectories.
Lump sum (LS): the entire amount invested at month 0. Final value FV = P × Π(1+rt)
where rt is each month's return.
Dollar-cost averaging (DCA): total amount divided across N months, invested in equal tranches. Money waiting in cash earns the safe rate (~0% real). Each tranche compounds from its own entry month forward.
We run 5,000 Monte Carlo paths sampling monthly returns from a log-normal distribution calibrated to historical S&P 500 stats (μ ≈ 7% real, σ ≈ 15% annualised). For each path we compute LS final value and DCA final value, then count how often each wins.
The result is consistent with Vanguard's research: at typical 5-10 year horizons, lump sum wins 65-70% of the time. The DCA-wins minority is concentrated in scenarios where markets fall significantly during the spread-out period — which is the scenario DCA is designed to protect against.
Math runs locally. Inputs never leave your browser. Source on github.
Scenarios we've already crunched
If your situation matches one of these, the article walks through the answer:
- $50K bonus or inheritance: lump sum wins 67% of paths — the data behind the headline number, plus when the 33% scenarios actually hurt enough to matter.
- When DCA is worth the expected-return cost — behavioral protection against the panic-sell scenario, and why "default DCA" already happens via paychecks.
- Index funds vs stock picking: 90% of pros lose — and why the choice of vehicle matters more than the choice between LS and DCA.