what is lump sum investing?

Lump Sum Investing is the practice of investing a substantial sum of money at one go instead of breaking down into multiple instalments.

• It is the opposite of Dollar Cost Averaging, where one invests a fixed dollar amount of their money at regular intervals over a period of time.

• The 'one strike' strategy defined by lump-sum investing is appealing to investors who don’t have the time or the inclination to monitor their investments.

• If you put all your money in the market in one lump sum, you don’t have to worry about timing the market or setting up consistent investments.

• For example, if you’d invested 20K right after the stock market tanked in March 2020 due to COVID-19, today you’d see significant increase in your portfolio and an even greater return over time.

• Its possible that the stock market may crash the day after you invest a lump sum of cash, if your risk tolerance is low this can create fear and anxiety.

• The quicker you get your money into the market, the more time you allow it to grow.