Lump Sum vs Dollar-Cost Averaging

The problem
$12,000 to invest · 12-month horizonLump sumall $12k today100% investedDCA$1k/month × 12drip in over a yearwhich finishes the year with more money?

You receive a $12,000 bonus. You want to invest it in the stock market. Two strategies:

  • Lump sum: invest all $12,000 today.
  • Dollar-cost average (DCA): invest $1,000 every month for 12 months.

Which strategy gives you more money on average at the end of the year?