Dollar Cost Averaging vs. Lump Sum Investing (This works best)

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[Abdul_Rahman]

This is an extremely great video.
Lump sum vs DCA.
This is me personally. I’m 30, I don’t own a SS ISA. Just a SIPP.
I only invest £500 per month because that’s all I can afford without compromising my lifestyle and happiness.
If someone gave me £6k. I would 100% lump sum it and not invest for the year.
If I came across £162k, I would again lump sum invest that into my sipp and not invest for the rest of my life and just let that compound, hopefully when I reach retirement there’ll be a sizeable amount.

[Tim_Bassett]

nice clear video Chris, and like most things it depends on a persons situation to find the best option....none of them are wrong, after all 🙂 This year I am averaging in to the ISA, for no other reason as we spent our spare cash on bathrooms 🙂 I like where you ended up - lump sum in, but then keep thats a balance of both worlds.

[Blueskyuk]

Just come across your channel - you are a great communicator Chris and offer nicely balanced advice, combined with your own experiences. Look forward to more 😊

[rustyfeatherstone]

Would you advise investing in bitcoin by dollar cost averaging or lump sum? Starting from $0. Thank you!

[Gtbg]

I’m fortunate to be able to add full isa amount and ponder this question each time. Years back I just decided to do both 10 k straight in and 10k spread equally over 10 months. This year I was a bit more reluctant to go all in with the 10k so decided to pound cost average the 20k in. But then I had a wobble and rather than doing this took the cash isa route full 20k in at 5.2percent. I calculated that the stock market would have to yield around 9-10% to match this risk free return according to my initial plan of pound cost averaging into the market with 1666 pound going in each month. I just feel the market is fairly high already so hence this approach. Does this make sense?

[pw]

0.36 seconds in "Super high interest rates" ?? I know you're quite young but interest rates are not super high in fact they are still well below the long term average. Rates since 2008 have been historically low. What's happening now is a gradual return to normality, that is extremely painful for some because of current debt levels.

[owencomley]

nice video man im 19 and started investing 1 year ago now all your videos are very helpful! i have seen the benefit of dollar cost averaging so i would definitely recommend. i have also just got a credit card to built my credit. i was wondering if you could do a video regarding credit cards and possibly go into detail about the benefits and talk about some reward cards.

[daveymac]

I am wondering with this study, has it taken into account the fact that uninvested cash would still be gaining 5% interest in todays market? Would Lump Sum still beat DCA if the lump sum was sitting in a 5% interest account, and you gradually invested that sum in the market each month?

[jacoslapbass]

Hi Chris,

Do you ever have liquidity issues with your Vanguard Developed World ETF? I have the same one and it usually takes 7-14 days for my purchases to be completed. Quite annoying!

[lancegordon]

Am I right in thinking XTB do not offer an ISA?

[maccgordon]

Your comparison of cost averaging vs lump sum investing was going well until 10:30 when you lost me by introducing a third method called 'cash' without defining how the cash method funds a portfolio differently from the other two methods. I'm new to the terminology so I need it spelling out.

[VegasMilgauss]

Time in beats timing. Period (or full stop for you Limeys).

[maccgordon]

As I dripfeed my £20K into my ETF ISA, I started by ignoring the market direction & investing periodically which I believe is cost averaging. Shortly afterwards, I introduced a simple rule - suspend investing into my ETFs that are going down and go-ahead with investing into my ETFs that are going up. Has this rule got a name & how successful will it be?

[JMEUTEUW]

Others like Ben Félix say the opposite, but each to their own I suppose