Dollar Cost Averaging vs. Lump Sum Investment Analysis
S&P 500 Historical Performance Comparison
This analytical tool compares the historical performance of two investment strategies: Dollar Cost Averaging (systematic periodic investments) versus Lump Sum (single initial investment). Results are based on actual S&P 500 historical data and demonstrate the impact of market timing versus systematic investing approaches.
Analysis Parameters
The fixed dollar amount invested at each interval
How frequently investments are made
Study Period
Comparative Analysis Results
| Strategy | Total Invested | Shares Acquired | Avg. Cost/Share | Final Value | Total Return | Annualized Return |
|---|---|---|---|---|---|---|
| Dollar Cost Averaging | $15,600 | 6.15 | $2536.05 | $36,099.212 | +131.41% | — |
| Lump Sum | $15,600 | 11.78 | $1324.09 | $69,141.357 | +343.21% | — |
Analysis Interpretation
During the selected period from 2012-02-01 to 2025-01-02, the lump sum strategy achieved superior returns.
The dollar cost averaging approach resulted in an average cost basis of $2536.05 per share, compared to the lump sum entry price of $1324.09 per share. This higher average cost suggests the market generally trended upward during the investment period.
The lump sum strategy's outperformance typically occurs during sustained bull markets where early market exposure maximizes returns. This result suggests the selected period experienced predominantly upward price movement with limited volatility that would favor dollar cost averaging.
METHODOLOGY NOTE
This analysis assumes reinvestment of dividends and excludes transaction costs, taxes, and fees. Historical performance does not guarantee future results. Both strategies involve market risk.
Data source: MacroTrends S&P 500 Historical Data