You’ve come into some money and you want to invest. Is it best to invest it all at once or dollar cost average the balance over a period of time? Today we look at evidence based research to determine the correct answer.
The debate between lump sum and dollar cost averaging is probably one of the oldest in investing. Thanks to some very thorough research from Vanguard which is linked below, we know what the data says is the best thing to do. But really this is still only half the story and with Lump sum vs DCA there is a few factors to consider.
The study I reference can be found here:
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lnvesting in crypto now shouId be in every wise individuaIs Iist, in some months time you'II be ecstatic with the decision you made today.
Great video as ever mate! Thanks for reading all the boring stuff and making it interesting 👊😁👍
Great work bro, some really solid facts and research!
Carry on creating these masterpieces. ON THE UPPPPP
Take it steady mate
Chay
Love all the memes and clips in this video, the Anchorman one with Paul Rudd is legendary! Lump sum for the win, build your conviction in what you're investing in, get your money in and let it do it's thing long term.
This was a damn good video, Damo 👏
Before dumping your money into the market, make sure you know where you dump it into as well.
#1 strategy – Buy the dip !!! In the Fed we Trust.
As always great video. You hit it out of the park
Another view: swimming with sharks makes you expert, therefore less likely to be bitten by shark 🙂 Thank me later
Hi Damien
Do you know what sites offer the best sign up rewards for depositing? Also a good place to stake.
I have solana and a bit of Bitcoin so I’m basically looking for a nice sign up reward for depositing and also looking to accumulate while hoddling both Bitcoin and solana
Great piece of finacial insight – u have a knack for picking subjects uppermost in peoples minds
Could you do a British version of this video please? https://youtu.be/tNGLDtLxqGo
Another great video carol, would love to hear what exactly you would throw your windfall into? Stocks? Etfs? Bonds? Crypto?
Thanks again Damian! Love your content. Please keep it up!
Great video…just a quick question. Can we buy I bonds on the US treasury direct website if we are from the UK? If not were can we…Vanguard?? Plus will we get the same high interest ? Thanks in advance 👍
Love the video!! I always wrestle with this, dump and run or sprinkle and watch!? Neither is perfect and we just don't know what's around the corner and it's that aspect we should try and make peace with. The markets tend to recover as history has told us, so invest as soon as available and don't look back. Index fund investing certainly dampens any next day tank regrets. When I first started investing I would only buy single stocks and to watch them tank the day after purchase is awful!
If you had a big sum but you invested 20k per year into an ISA instead of all in one go. Would the tax savings make it better than investing it all in one go?
Problem is, look at the S&P 500, its exponentially gone up in the last two years, unlike any other time. Now, I bought in December 2021, Peak, its now tanking, but how far, the market is high. Now, consider a USA and West who's never held so much debt, a USA being run by a wrecking ball nutter, a USA losing its currency hegomany to the East. Ask yourself is the North American markets going to return the next 10 years, or fail like never before? What is happening now is like no other time
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So much talk and overthinking. Just get in the market ffs
In this market – investing all at once is very risky
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Great answer to the age old question! Very insightful and evidence based, can always trust you to back up your opinions. Very well explained, keep up the great work my friend!
The lion king clip gets me every time!
Out of curiosity… Is it just me thinking it or you've been a bit quite recently? Anything boiling in the pot for us?
I think this is based on your appetite for risk and whether or not your mentally/psychologically ready to put a lump sum in at once and watch it go down. Even if you are in it for the long haul, it can still play tricks with your mind. That's why DCA is probably the best approach for 99% of people because they do not have their emotions in check.
Great video – thanks. Love the quality of your production.
One of the things that caused such confusion and conflict during the COVID-19 pandemic is that statistics are not easy to interpret. I love how you make the subtleties so easy to understand, even for someone like me with the financial attention span of a very tiny gnat. Thanks Damo 👍
I lump-summed the remaining 18k into my S&S isa (VLS60!) in early april after starting my investing drip-feeding £500 for the previous four months and now wished i'd carried on drip-feeding! Your previous video on 'the lost decade' (when long term investing is not long enough!) would suggest that in a bear market drip feeding is best! I realise youre not making a prediction, so no disrespect, and your videos are very helpful. I'm investing for 10 years so if it was the case that the next decade was like the 1970's would i be better bringing my lump-summed money back to cash and begin drip-feeding again? I have, however, started drip-feeding this years S&S isa allowance! Thanks and keep up the good work!
Thanks for another brilliantly put together video…. btw I went very much LSI on tsla because the fear is so high, and putting more in as we slide down. So this is LSI + DCA? 😀
Man I just looked at Netflix that's a big decline
When talking about time frames, how would you define short term vs ling term? Thanks
Great video, thank you.
Great video Damo, really great explanation of something that can be a really tough decision. I’m a bit late to the party, as unlike some other finance videos I watch while doing something else or listening like a podcast, I really want to make time to watch yours without any distractions. A real event! I have another 2 in my feed to watch and always excited to see when you post another, keep up the good work.
DCAing definitely feels better psychologically. Even though lump sum investing tends to outperform. For example, I started my Roth in 2019, and for the first 3 years i averaged $500/month to max it out at the end of the year. But this year, i chose to lumpsum and maxed it out in the first 2 months. With this recent 20% drawdown, I feel stupid for investing all my money at the all time highs for VTI. I know 30 years from now, it;ll probably not matter, bc time in the market beats timing the market. But right now, in the short term psychologically it sure feels crappy lol.
No bother!
Great Vid as always Damo!!! On a slight tangent does investing in a number of different ISA’s make a difference to the overall gains over time. For example if I have invested £60k in VUSA Vanguard fully maxed allowance this current tax year & over the next three years open another ISA VUSA on Freetrade and put in £20k each year for 3 years to max my ISA compared to adding the same amount to the same ISA?
Hope that makes sense. Trying protect against any problems with companies going bump as the guaranteed amount is £85k (FCSA)
Answered my question with this video thank you! So glad I came across your channel and even better with humour and being UK focused :))
Why should I invest in a S&S Isa with Vanguard when I want to invest in individual stocks too, considering I want to invest in them monthly? Is it better to just invest all in one place?
Hello Damien, another very helpful video. Love your entertaining, no nonsense advise/opinions backed up with good solid analysis of data mixed with a touch of the real world. So I'm 56 have 10k and looking to invest. Given I know bugger all and could drive myself mad or into inaction trying to be clever, I'm pretty sold after this on just banging it all into an index linked so all good so far. I then have around 200 to 300 amonth spare to invest, so my question is can I lump some and the top up that fund monthly, or do I need to have another fund to do that in So affectively lump some and then DCA or one lump. some fund and a separate DCA fund. I've heard lots about doing one or the other in a fund but not both. Also can you have more than one fund in an ISA or does it have to be separate ISAs per fund. Any help would be much appreciated thanks
I absolutely love that ending 😂
I regret not putting a lump sum in during the crash in 2020. Now I am patiently waiting for the market to drop again.
What about transferring isas from one provider to the other, when they don't have compatible funds and your forced to sell. Do you sell from the 1st provider and materialize all the profits/loses, and then reinvest everything in the new provider? Or you keep different isas and start with a smaller portfolio/stash in the new provider? Thanks
Great Video!