Fixed cash makes the share count move
Dollar-cost averaging invests the same cash amount repeatedly. Shares bought in each period equal the fixed purchase amount divided by that period's price, so lower prices acquire more shares and higher prices acquire fewer.
Twenty-four equal purchases at changing prices
Twenty-four purchases of $500 total $12,000. Starting at $25 and increasing price 1% per purchase, the model buys enough shares for an average cost of $27.96, while the arithmetic average of the quoted prices is $28.10.
A straight price drift is only an illustration
The model applies one steady price change from purchase to purchase and assumes every scheduled contribution is made. Markets do not move in a straight line, and missing a contribution or changing its amount alters the actual average cost.
The calendar schedule belongs beside the inputs
Enter the schedule's real interval in your own notes: weekly, monthly, or quarterly. The number of purchases alone does not reveal calendar duration, which matters when comparing this strategy with a lump-sum investment.
Acquisition cost is not future portfolio value
This page isolates the acquisition-price effect of fixed contributions. It is different from a stock average based on two known lots, and it does not estimate portfolio growth after the last purchase.
Trading rules can prevent the exact purchase
Fees, minimum trade sizes, taxes, and fractional-share availability can prevent the exact purchase shown. A lower average cost does not guarantee a profit; the final market value still depends on the price when the shares are valued or sold.
Fewer dollars buy fewer shares at a higher quote
The fixed-cash rule means the share quantity varies automatically. At $25, a $500 purchase buys 20 shares before fees; at a later $30 price it buys about 16.67. That mechanical discipline is the defining feature of the model, but it does not answer whether cash should be held back for an emergency or whether the chosen asset fits a portfolio.
Changing the cash amount changes the strategy
Changing the purchase amount whenever prices move turns this into a different strategy. If the plan is meant to be automatic, decide the cash amount and schedule before observing the next quote. That keeps the comparison meaningful and prevents a hindsight story from being mistaken for a repeatable rule.
Equal cash is the rule, not equal shares
At the opening $25 price, a $500 purchase buys 20 shares. At a later $30 price, the same $500 buys 16.6667 shares. That inverse relationship is the whole mechanism: equal scheduled cash buys a variable number of units. It differs from an instruction to buy 20 shares every month, whose cash cost rises and falls with the market.
The average cost is total cash divided by total shares
After 24 deposits of $500, total cash committed is $12,000. If the simulated purchases acquire about 429.18 shares, $12,000 ÷ 429.18 is $27.96 per share. The displayed average price of $28.10 is a different statistic: it gives each quoted period equal weight. Comparing the two reveals the effect of putting equal dollars, rather than equal shares, into the sequence.
A rising drift is not a market history
The 1% per-purchase change creates a smooth illustration, but real prices can jump, reverse, or remain flat. A steadily rising sequence means early purchases receive the lowest prices; a falling sequence would reverse that pattern. The calculator cannot judge whether a selected asset is diversified, appropriate, or likely to follow any path. Its output is a mechanical purchase ledger under the chosen sequence.
Schedule failures are part of the result
A missed $500 deposit reduces invested cash and removes one set of shares; it is not harmless because the missed date may have had a low price. Minimum order sizes, trading fees, and no-fractional-share rules can also leave residual cash. Keep the planned frequency, execution dates, and actual filled prices alongside the model. Investor.gov describes dollar-cost averaging as equal portions at regular intervals, which is the discipline this simplified rule isolates.
A lump sum is a different counterfactual
Putting $12,000 in on the first date gives all money the first price; spreading it across 24 dates changes market exposure and cash timing. Neither result proves which choice will outperform in advance. Compare them only after naming the available cash date and the risk of delaying investment, not by calling one average price universally better.
Price drift is per purchase, not per year
A 1% change on 24 monthly purchases compounds twenty-four times, while a 1% annual change applies once. The field intentionally describes the interval between purchases. Record the interval beside the result so that a weekly plan is not accidentally interpreted as a two-year monthly path.
Compare the plan with filled orders
A scheduled contribution is only a plan until cash is invested. Actual execution can differ because a market was closed, cash was unavailable, or the price moved between instruction and fill. A useful review compares each intended $500 amount with the broker confirmation, then uses real shares and cost to update the average. Use the same interval in every scenario so the modeled price path represents the intended contribution habit. This distinction keeps a regular saving habit from being misreported as a prediction about market direction.
Source for the strategy definition
Investor.gov defines dollar-cost averaging as equal portions invested at regular intervals. The page uses that definition for its equal-cash rule; it does not treat it as a return forecast.