Should I invest a lump sum now or spread it out?
Test investing a pile of cash all at once against putting it in a little each month, on every start month since 1926, and see how often each came out ahead and how bad the worst starts were.
Spread it over
Equal parts at the start of each of 12 months; the part not yet invested earns the Treasury bill return.
Start dates to test
Every start month from the year chosen to the last one that leaves room for the whole period, through August 2026.
LUMP SUM VS AVERAGING INLUMP SUM USUALLY AHEAD
69%of start months
Across 1,191 start months from July 1926 to September 2025, investing $100,000 at once ended ahead of spreading it over 12 months in 823 of them (69%), by a median $4,348 (4.3% of the amount). When averaging in won, it was ahead by $8,256 on average, and the worst start for the lump sum, September 1931, left it $53,480 behind. Averaging in cut the damage in the worst 5% of starts: $87,999 against $77,322.
Lump sum ahead
823 of 1,191
Median difference
+$4,348
When averaging won
$8,256 ahead
Worst 5%, lump / DCA
$77k / $88k
Lump sum minus 12-month averaging, in dollars, by start month
Above the line the lump sum won and below it averaging in did. The lump sum's best start against averaging was July 1932 (+$85,623); its worst was September 1931 (−$53,480), when the market kept falling after the money went in.
By decade of the start
| Started in | Start months | Lump sum ahead | Median difference |
|---|---|---|---|
| 1920s | 42 | 76% | +$12,113 |
| 1930s | 120 | 50% | +$127 |
| 1940s | 120 | 68% | +$4,369 |
| 1950s | 120 | 79% | +$6,217 |
| 1960s | 120 | 69% | +$3,215 |
| 1970s | 120 | 55% | +$1,188 |
| 1980s | 120 | 68% | +$4,836 |
| 1990s | 120 | 84% | +$6,075 |
| 2000s | 120 | 56% | +$1,359 |
| 2010s | 120 | 85% | +$6,770 |
| 2020s | 69 | 80% | +$6,758 |
The split by decade shows how much depends on when you start: the lump sum was ahead in 85% of the start months in its best decade and 50% in its worst. A full decade holds 120 overlapping start months, so treat the rows as a few episodes rather than 120 independent tests.
What $100,000 became after 12 months
| Across all start months | Lump sum | Averaging in |
|---|---|---|
| Worst | $34,260 | $52,563 |
| Worst 5% | $77,322 | $87,999 |
| Median | $113,871 | $109,470 |
| Best 5% | $142,419 | $124,250 |
| Best | $256,401 | $170,778 |
The lump sum's median is $113,871 against $109,470 for averaging in, but averaging in ended higher in the worst cases: $52,563 against $34,260. That trade, a lower typical result for a shallower bad one, is what averaging in buys. Both include the market's dividends and, for the cash waiting, the Treasury bill return.
What moves the needle
Each row re-runs the calculation with one change. Click to apply.How it's computed
FORMULA
Lump sum, per $1 = Π (1 + market return) over the N months from the start month
Averaging in, per $1: each month move 1/N from cash to stock, then stock × (1 + market return) and cash × (1 + Treasury bill return)
Both are valued at the end of month N, when the averaged money is fully invested; the difference is the lump sum less averaging in, in percent of the amount
Repeat for every start month with a full N months of data; report the share the lump sum won, the median and range of the difference, and the split by decade
- The market is the value-weighted return of all US stocks in the CRSP database, dividends included, month by month from July 1926 to August 2026; cash is the one-month Treasury bill return each month (Kenneth R. French Data Library, read September 30, 2026). Both are nominal and before tax, fees and trading costs.
- Averaging in means equal parts at the start of each of the months, the first on day one. Money not yet invested earns that month’s bill return. A savings account paying more, or a shorter delay, would narrow the gap a little.
- The two are compared when the averaged money is fully invested, at the end of the period. After that they hold the same stocks, and the dollar gap between them then rises and falls with the market.
- There are 1,191 twelve-month start dates in about 100 years. They overlap, so they are far fewer than that many independent tests, and the late-1920s to early-1930s crash and the following decades weigh heavily in the tails.
- The stocks are the whole US market. A portfolio with bonds falls less in a bad year, which would make averaging in less costly than shown; this page does not model one. The past is one path, not a forecast.
- Regular contributions from a paycheck are averaging in by necessity, not a choice against a lump sum. This page compares money you already have and could invest today.
WORKED EXAMPLE · SAMPLE NUMBERS
For $100,000 spread over 12 months, $8,333 goes into stocks at the start of each month while the rest earns the bill return. The lump sum was ahead in 823 of 1,191 start months (69.1%); the median lump sum ended at $113,871 and the median averaged-in money at $109,470.
SOURCES
[1]Fama/French 3 Factors, monthly (F-F_Research_Data_Factors), from the 202608 CRSP databaseKenneth R. French Data Library, Tuck School of Business at Dartmouth[2]Dollar Cost AveragingU.S. Securities and Exchange Commission, Investor.gov glossary[3]A Note on the Suboptimality of Dollar-Cost Averaging as an Investment PolicyGeorge M. Constantinides, Journal of Financial and Quantitative Analysis 14(2), 1979
HSBuilt by Hussain Sehorewala · checked against worked examples · Sep 29, 2026
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Questions about this result
On the record of US stocks since 1926, investing at once came out ahead more often than not. Averaging in came out ahead in a minority of start months, mostly ones followed by a fall, and its worst outcomes were shallower. Which you prefer depends on how much a fall soon after you invest would hurt you, and this page shows the sizes.
Stocks have risen in most months, so money kept in cash for a few months usually misses some of the rise. A lump sum is invested for the whole period, while an averaged-in amount is invested for about half of it on average. The bill return earned meanwhile is small compared with the market’s usual return.
When the market falls soon after you start, because the money still in cash avoids the fall and buys shares at lower prices. In the record, the lump sum fell furthest behind for starts in the early 1930s, when a 12-month plan begun in the worst month left the lump sum more than half the amount behind.
On the full record, yes: the lump sum won 62% of the 3-month periods, 65% of the 6-month, 69% of the 12-month, 73% of the 24-month and 76% of the 36-month ones, because more of the money waits longer. Other start years can differ, as the chart for each choice shows.
That is averaging in by necessity: you invest money as you earn it. The comparison here is for money you already have and could invest today, such as a bonus, an inheritance or a sale.
No. The stocks here are the whole US market. A mix with bonds falls less in a bad year, so averaging in would cost less than shown, but this page does not model one. It is not advice about your money.
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