What Happens If You Keep Buying Through a Crash? A DCA Backtest Through Every S&P Selloff

With tech stocks selling off hard this week, a familiar question is bouncing around every investing forum: should I stop my automatic investments until things calm down? It feels like the smart, cautious move. So we did what we always do — we ran the actual numbers. The result is one of the most reassuring things you can learn as a long-term investor: the people who kept buying through the scariest moments came out ahead of the people who waited for the all-clear.

The setup

Dollar-cost averaging (DCA) means investing a fixed amount on a fixed schedule — say $500 on the first of every month — no matter what the market is doing. You buy when it's high, you buy when it's low, and you never try to time anything.

The fear is that buying during a crash is like "throwing good money after bad." The reality is the opposite, and the reason is mechanical: a fixed dollar amount automatically buys more shares when prices are low. Crashes are when your money works hardest.

What the history shows

In our 20-year S&P 500 DCA backtest, we put $500 a month into the index from 2006 to 2025 — a window that included the 2008 global financial crisis, the 2020 pandemic crash, and the 2022 bear market. Three of the worst declines in modern history, all inside one investing lifetime.

The investor who kept buying through all of it didn't just survive. The shares they bought during those crashes — at fire-sale prices — became some of the most profitable purchases in the entire portfolio. The 2008 and 2020 contributions in particular were bought near the bottom and rode the full recovery up.

The pattern repeats across every major selloff:

• 2008–2009: The market fell roughly 50% from its peak. Investors who kept their monthly contributions on were buying the S&P 500 at prices that, in hindsight, were a generational discount. Within a few years they were deep in the green.
• March 2020: The fastest crash in history — and one of the fastest recoveries. Pausing contributions for even a few months meant missing the cheapest shares of the decade.
• 2022: A long, grinding decline that tested everyone's patience. The steady buyers accumulated shares all the way down and were rewarded as the market recovered to new records.

The math behind "crashes are a discount"

Say you invest $500 this month and the ETF costs $100 per share. You get 5 shares. Next month the market drops 20% and the same ETF costs $80. Your $500 now buys 6.25 shares — same money, more ownership. When the price eventually climbs back to $100 and beyond, those extra shares you scooped up cheaply are pure tailwind.

Now compare that to the investor who got scared at $80 and stopped buying. They didn't avoid a loss — they just skipped the cheapest shares on the menu and waited to buy back in at a higher price once they "felt safe." That instinct, repeated over a lifetime, is staggeringly expensive.

The catch (because there's always one)

DCA through a crash only works if two things are true:

1. You're buying something diversified that recovers. This math holds for a broad index like the S&P 500, which represents 500 of America's largest companies and has always eventually recovered. It does not hold for a single hyped stock that may never come back. The index recovers; individual companies sometimes die.
2. You don't actually need the money soon. If you might have to sell during the downturn to pay rent, a crash stops being a discount and starts being a real loss. That's why an emergency fund in cash — separate from your investments — is what lets you stay calm and keep buying.

The takeaway

The headlines this week are loud, red, and scary. But the boring lesson of market history is that automatic, unemotional buying through downturns is one of the most powerful wealth habits there is. The discomfort you feel when you buy during a selloff is, quite literally, the feeling of a good long-term decision.

If you want to see how steady monthly investing plays out across different time horizons, run your own numbers in our free DCA Calculator.