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Whats better cost averaging or lump sum investing?

Whats better cost averaging or lump sum investing?

  • Lump sum investing

    Votes: 3 33.3%
  • Cost averaging investing

    Votes: 6 66.7%

  • Total voters
    9

DavidG

New member
Apr 3, 2021
57
16
472
Personally i like cost averaging as there can be so many different opportunities in the market i want to be able to buy them all when i can.
 

The Dividend Experiment

Administrator
Staff member
Moderator
Feb 23, 2021
511
303
3,228
If you have a large amount of money then its better just to invest it all rather than divide it into monthly allotments and invest it every month hanging onto the rest.

For example, if you have £12,000 in January you get better returns (on average) from just investing it there and then, than delaying it for the sake of cost averaging
 

The Dividend Experiment

Administrator
Staff member
Moderator
Feb 23, 2021
511
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3,228
And if you don't have a large sum of money and just investing each month as your money comes in then technically you are lump-sum investing anyway
 

23rdian

New member
May 13, 2021
41
38
337
I think its generally better to be cost averaging - why does everyone always prefix this with dollar or pound when the two words will do :)

However, I think the exception to this is when we have had a big crash (2020 would be a prime example)

So I wouldn't put *all* your disposable into cost averaging.

This is where you want to have had some cash to throw at it, you know its coming back, its just a matter of time. If you had bought RMG in the dip for example you would be looking at 14% yield on cost now :)
 

Metropolitania

New member
Apr 19, 2021
13
4
182
I feel cost averaging investing is better. Because cost averaging can help reduce the impact of short-term price swings. It helps to minimize the impact of volatility when investing. As we know that the market can be extreme and vary significantly.
 

RealisticOption

New member
Jul 29, 2021
6
6
27
If you get Lump sum in form of inheritance or Capital gain, then lump sum investing would be better. As money's value decreases every day it is better to invest quickly in a good companies share. Rather than keeping it idle in savings bank account.
But if you go for systematic investment Cost averaging is much better investment method compared to lump sum investing. Can accumulate shares at lower prices and can get a very good return in the long run. Risk is also minimized in Cost averaging method.
 

Citylights99

New member
Apr 19, 2021
11
4
182
I am a executive and get paid every month. So, I invest every month. This seems efficient for me and I can avail many tax benefits thanks to this. At the year end when I file for my income tax returns it's very easy for me, I can work peacefully without rushing or hurrying. And I also cut my losses in stocks invested and would adjust in the gains I made. This frees up my capital and helps me save money in taxes. Saving today is more important than investing tomorrow. Because you can invest tomorrow only if you save today.
 

JD_Investing

New member
Apr 13, 2021
9
9
187
Who has the capital for lump sum. Sheesh
Pound cost average all the way.
Buy and buy and buy at whatever the level is.

*although lump sum beats it if the market going up and up.
 
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