Does anyone have a reference to a detailed mathematical analysis of the process of dollar cost averaging and whether it is really beneficial?

This question isn't detailed enough.

1 Answer 1


It is beneficial when compared to buying a fixed number of shares. Here's an introductory analysis. In summary, cost averaging yields the harmonic mean of the entry prices. The resulting cost basis is biased towards the lower outliers. The beneficial effects are more noticeable as volatility increases.

  • I think that's exactly what I'm looking for. Commented Mar 22, 2011 at 19:39
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    +1 An introductory article that uses calculus? Great for "detailed mathematical analysis", bad for my brain...
    – bstpierre
    Commented Mar 22, 2011 at 19:41
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    Nice article, but note, it compares equal dollar purchases vs equal number of shares. Not lump sum. Commented Jan 8, 2013 at 1:13
  • @JoeTaxpayer but it still provides a good framework to think about how DCA works. Thanks!
    – zsljulius
    Commented Oct 18, 2013 at 17:10

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