Calculate the benefits of dollar cost averaging

A great way to reduce the impact of market volatility is to invest set dollar amounts regularly over time. This strategy - known as dollar cost averaging - is a good approach if you have a long term investment goal and can make regular investments.

You can use the calculator below to compare the effect of investing a lump sum vs employing a dollar cost averaging investment strategy over a 12 month period. Simply select one of three hypothetical market scenarios from the drop-down menu, or enter your own unit prices manually, and enter a monthly investment value to calculate the benefit.

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This calculator is a useful tool to show how dollar cost averaging may assist you in obtaining your financial goals. Dollar cost averaging does not guarantee a profit and should not be seen as a way to maximise returns. The information provided does not represent a quote and provides an indication only. The calculator does not take into account your individual investment objectives, financial situation or investment needs and you should assess whether this information is relevant and appropriate to your individual circumstances before making any investment decision. The calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product and you should consider obtaining advice from a financial services licensee before making any financial decisions.

Although Rabobank considers the assumptions used to be reasonable, they are subject to the limitations. In each of the rising, declining and fluctuating hypothetical scenarios, the unit prices increase, fall, or rise and fall, respectively, and the variations assumed in these scenarios are used to illustrate the effect of the respective movements in price.  The unit prices represented in the three unit price scenarios are fictitious and intended as a demonstration of the three market scenarios only. When unit prices are entered manually, Investor 1 may obtain a greater benefit than Investor 2 if the unit price in month 7 is lower than all other unit prices during the 12 month period. The regular contributions are assumed to be made monthly, and a minimum investment amount is set at $250, being an amount a retail investor would reasonably have available to contribute on a monthly basis. The two strategies are compared over a 12 month period which is considered to be a reasonable period to illustrate the effect of each strategy. The lump sum contribution by Investor 1 is calculated by multiplying the monthly investment amount selected by 12 and is assumed to be made in month 7 as the mid point of the 12 month period.

The results shown by the calculator are a guide only. Rabobank and its officers, agents, representatives and employees accept no responsibility for any reliance on the calculator or conclusions reached by you in using the calculator. These calculations do not take into consideration any entry or ongoing fees or your individual financial circumstances, earning potential and potential to make the ongoing investments, the impact of taxation or changes to an individual's cost of living. In addition, the calculations do not include or account for future changes to taxation, legislation and other economic conditions such as or changes in inflation or interest rates.  These factors may vary the results that you will receive.  The formulae used within this calculator may change without notice.