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Message
Getting large lump sum invested
Posted on 11/19/20 at 8:55 pm
Posted on 11/19/20 at 8:55 pm
Whether it be a bonus or inheritance, would you dca it in or get all of the funds invested at once?
10
Posted on 11/19/20 at 9:04 pm to nineteeneighty
Dollar cost average! Don't be so arrogant to think you could call the exact time to invest the money. But if you are asking advice on this board, you might want to get a little better foundation on investments before everyone else ends up with your $$$$$$$$$.... Best of luck to you.
This post was edited on 11/19/20 at 9:06 pm
Posted on 11/19/20 at 9:05 pm to nineteeneighty
Dollar cost average into 50% S&P 500 ETF and 50% Growth Mutual Fund such as Fidelity Blue Chip Growth or an ETF in Growth Stocks. Do 10% per month until your totally invested. Of course this is if you want to be in the Market. If your conservative, do the same, but in a Fund like Fidelity Target Date 2035 or 2030.
Posted on 11/19/20 at 9:08 pm to nineteeneighty
Odds are that lump sum investing is better. Anyone who says different does not know the facts on this topic.
That does not mean it’s always better or even definitely better.
One suggestion is to do a hybrid:
70% now, 20% later, 10% even later..
Or..
100% in conservative holdings and switch some % to more aggressive holdings on pullbacks
That does not mean it’s always better or even definitely better.
One suggestion is to do a hybrid:
70% now, 20% later, 10% even later..
Or..
100% in conservative holdings and switch some % to more aggressive holdings on pullbacks
Posted on 11/19/20 at 9:10 pm to nineteeneighty
Statistically speaking, lump sum investing edges out DCA.
Posted on 11/19/20 at 9:32 pm to nineteeneighty
I would dollar cost average with how high the market is right now. If it was lower lump sum would be the way to go.
Posted on 11/19/20 at 9:47 pm to nineteeneighty
As has been mentioned, the objective data on the subject says that lump sum beats DCA, period.
With that said, from a human psychology perspective, my personal answer would be that it depends on how much money we are talking about. Is it so much that, were the market start to fall, you would be inclined to panic and do something really stupid? If so, DCA. If not, just invest it all now.
With that said, from a human psychology perspective, my personal answer would be that it depends on how much money we are talking about. Is it so much that, were the market start to fall, you would be inclined to panic and do something really stupid? If so, DCA. If not, just invest it all now.
Posted on 11/19/20 at 10:09 pm to nineteeneighty
I always lump sum
Posted on 11/19/20 at 10:23 pm to nineteeneighty
At these levels? DCA.
Posted on 11/19/20 at 11:02 pm to geauxpurple
The above opinions that state that technically lump sum is better are correct (except it can be hard on the psyche).
If the market generally goes up 7% per year then every day you should go up 7%/365. So by dollar cost averaging you give up time in the market (the old saying “time in the market is more important than timing the market”).
Just to use easy numbers $1000x1.07^30 = $7612 whereas 29 years is $7114.
The people who say DCA are correct if there is a pullback, but DCA is a form of timing by the market/predicting. If you’re right, great, if you’re wrong, ok. If you buy today and it goes down 10%, it’ll come back up in 2-3 months very likely.
The biggest thing is to come up with a plan and hold to it. If you DCA you’re leaving a little on the table, but the only way you truly lose is if you let your $1000 stay $1000 instead of becoming $7000+.
If the market generally goes up 7% per year then every day you should go up 7%/365. So by dollar cost averaging you give up time in the market (the old saying “time in the market is more important than timing the market”).
Just to use easy numbers $1000x1.07^30 = $7612 whereas 29 years is $7114.
The people who say DCA are correct if there is a pullback, but DCA is a form of timing by the market/predicting. If you’re right, great, if you’re wrong, ok. If you buy today and it goes down 10%, it’ll come back up in 2-3 months very likely.
The biggest thing is to come up with a plan and hold to it. If you DCA you’re leaving a little on the table, but the only way you truly lose is if you let your $1000 stay $1000 instead of becoming $7000+.
Posted on 11/20/20 at 5:08 am to BornKjun
quote:
Odds are that lump sum investing is better. Anyone who says different does not know the facts on this topic.
^This is true according to data.
However, it is not “always” true in every transaction.
If you are “investing” the money for 10 years or greater, lump sum is fine.
If you are speculating, you need more precision on you “timing”.
Most people do not have exquisite timing.
“Time in the market” is more important than “timing the market.”
Posted on 11/20/20 at 8:09 am to nineteeneighty
A 5% return on a large number mathmatically creates a higher number sum than on a smaller figure deposited. Simple math. Trust the science is what I say.
Posted on 11/20/20 at 8:12 am to BestBanker
if you have a lump sum I would invest it all at once
If you don’t have a lump sum obviously you can’t
but the former has the advantage
If you don’t have a lump sum obviously you can’t
but the former has the advantage
Posted on 11/20/20 at 8:45 am to nineteeneighty
I wish I would have lump summed the last sum I put in.
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