The existing power grid investment allocation models ignore cost factors in investment allocation decisions, resulting in a situation where a large amount of funds is invested, but the expected benefits cannot be achieved. Therefore, a distribution network investment allocation optimization model based on a chaotic particle swarm optimization (PSO) algorithm was studied and established. An investment allocation evaluation index system was established based on the 10 kV distribution network. Funds can be allocated reasonably by guiding them toward project sets with high investment efficiency per unit by forecasting the interference degree matrix of unknown influencing factors. At the same time, the full life-cycle cost measurement method is used to comprehensively measure distribution network investment, decompose costs, and conduct a comprehensive evaluation of investment benefits. Finally, by combining the chaotic PSO algorithm, the investment allocation of the distribution network is optimized to maximize the benefits of the investment project. Experimental results show that the initial operating cost is 138 USD, the mid-term cost is 140 USD, and the later cost is 363 USD, all of which have been effectively controlled.