Dollar-Cost Averaging: The Harmonic Mean Engine
How automated periodic capital allocation removes cognitive friction and mathematically lowers average acquisition cost during market downturns.
Harmonic Mean Acquisition Price Formula
Variable Breakdown & Definitions
| Symbol | Parameter | Engineering Definition | Example |
|---|---|---|---|
| P_avg | Average Price | Real average cost per share acquired | $94.20 (USD / share) |
| C | Fixed Cash Allocation | Constant dollar contribution per interval | $500 (USD ($)) |
| P_i | Price at Interval i | Spot market price of the asset at time i | $100 (USD / share) |
| N | Interval Count | Total number of execution cycles | 36 (Cycles) |
*Note: Because shares = C / P_i, total shares acquired are weighted heavily during low-price regimes.
Test your own DCA strategy in the interactive simulator
Simulate volatile, sideways, and crashing markets to see your exact unit cost.
Buy the Average: Dollar-Cost Averaging as an Algorithmic System
Read the full unabridged digital book covering the Fixed-Dollar Effect, Maya vs. Leo, harmonic mean derivations, and the compounding crossover.
Authoritative Sources & Empirical References
WealthSyntax educational guides ground their mathematical models and historical assumptions in verified statutory databases and academic financial literature.
Dollar-Cost Averaging Just Means Taking Risk Later
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A Random Walk Down Wall Street
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