Buy the dip vs DCA
Compare waiting for drops with buying on a schedule, using real market data.
Market data through Sep 2026, updated monthly. How we calculateComes out ahead
Buying every month ends with $196,500. Waiting for 10% dips ends with $188,381, including $1,700 still sitting in cash. The dip-buyer invested in only 141 of 321 months.
Cash waiting for a dip earns nothing here; in a savings account it would earn some interest. S&P 500 monthly average prices, dividends reinvested (recent months use the last reported dividend, Jun 2023). Data through Sep 2026. One buy per month at that month's average price; no fees or taxes. Past returns do not predict future returns.
How this calculator works
Both investors save the same amount each month. One buys every month. The other holds cash and only buys when the S&P 500 is a chosen percentage below its all-time high, then invests all the saved cash at once.
The dip-buyer gets better prices, but often waits a long time in cash while the market rises.
Common questions
Does buying the dip work?
Buying after drops is good. Waiting for them usually is not, because long rises leave the cash on the sidelines.
Does the cash earn interest?
Not in this model. In a savings account it would earn some, which narrows the gap a little.
What dip size works best?
Try 5%, 10% and 20%. Larger thresholds mean fewer, longer waits.
FatDCA calculators are educational estimates, not investment, tax or legal advice. Results depend on the assumptions you enter, and past returns do not predict future returns.
One small deposit a week, for your brain
- 1chart from real data
- 1idea in plain English
- 1thing to do this week