This analysis models the two primary methods of investing a large pile of cash.
Lump Sum Investing means deploying 100% of the capital into the market on Day 1. Dollar Cost Averaging (DCA) means dividing the capital into equal portions and investing it at regular intervals (e.g., monthly for a year).
Mathematically, because markets go up over time, Lump Sum investing historically beats DCA nearly 70% of the time in backtests. However, DCA provides a psychological advantage and severe drawdown protection if the market happens to crash immediately after you begin investing.
By using StressTest.pro’s DCA vs Lump Sum simulator, you can run thousands of rolling windows to see the exact odds and outperformance margin between the two strategies for any given asset.