DCA simulator — what monthly investing does over time

A simulated monthly return path is turned into a synthetic index, and your contribution buys units at that month's level — more units when the level is low, fewer when it is high, which is the whole mechanism of averaging. The headline return is a money-weighted internal rate of return, solved by bisection rather than by formula, because with a stream of unequal-timed cash flows there is no closed form. That figure is deliberately not the market's return over the same window: it is yours.

Contributions are identical, monthly and never missed, which no real investor manages. There is no commission on any purchase and no spread, which flatters frequent small contributions the most — a fixed per-trade fee is proportionally heaviest on the smallest orders, and that is precisely the case this simulates. The return path is generated from the return and volatility you set rather than replayed from any particular fund's history, so the output is a property of your assumptions and not evidence about a market.

Why is my return lower than the market's return?

Usually it is not lower, it is measuring something different. The market's annualised return assumes a single sum invested at the start and left alone. Yours is money-weighted: the euros you contributed recently have had almost no time to compound, so they pull the rate toward zero even when every one of them is showing a gain. In a rising market this makes a perfectly healthy plan look weaker than the index it holds.

Does buying monthly actually get me a better price?

It gets you an average price, which is a different and more modest claim. Because a fixed sum buys more units when the price is low, your average cost per unit comes out below the average of the prices themselves. That is arithmetic and it is real, but it is not a way of beating the market — it is a way of not having to decide when to buy, which is worth more to most people than the arithmetic is.

Should I invest a windfall this way too?

That is a different question with a different answer, and the lump-sum comparison tool is the one that answers it. Contributing monthly from income is not a market-timing decision at all: the money arrives monthly, so it is invested monthly. Deliberately holding a sum you already have in order to feed it in slowly is a timing decision, and on average it costs you, because the market is rising most of the time you are waiting.

• Lump sum vs drip-feeding — which wins, and how often
• Savings rate calculator — what it does to your FIRE date
• Contribution splitter — what each extra fund costs