Pound cost averaging tactics

dllive

Hi,

I have £6k (remaining ISA allowance) sat as cash in my Vanguard account. Theres 2 months - when the new ISA season starts - whereby Ill probably start shuffling more money into my Vanguard account.

Id like to pound cost average that £6k. Probably into my LS100, FTSE All-World UCITS ETF (VWRL), or FTSE Global All Cap Index Fund Accumulation funds

Im curious, are there any pound cost strategies/tactics? Or does it not make much difference? For example, I could either:
- Divide the £6k and pay equal weekly amounts until the new ISA season
- Divide the £6k and pay monthly until the new ISA season (although given theres only 2 months left, its hardly 'pound cost averaging'!)
- Forget about the new ISA date and invest the £6k monthly (if so, how much per month makes sense?) or perhaps weekly?

Just curious to hear what others more experienced than myself would do.
Thanks

Billycock

 (although given theres only 2 months left, its hardly 'pound cost averaging'!)

And there's the answer to your question. There's a sale on at the moment. 

JohnWinder

Might as well complicate it by throwing dollar (read:pound) value averaging into the mix.

https://www.investopedia.com/articles/stocks/07/dcavsva.asp

MK62

This always going to something of a judgement call.......and afaik, there are no cost averaging strategies which stand out as being consisently better than others.
You have to accept that cost averaging will never give you the the best outcome for investing a pot of money......but it will always avoid giving you the worst.....only you can decide on your priorities here though.

PS......if the 6k is already in your ISA (its not clear from the original post), then the "new ISA season" date is irrelevant as far as that 6k goes.....you can invest it whenever you want.

dllive

Thanks guys. Very useful.
Ill read that Value Averaging link later.

lozzy1965

It is just spreading the risk.  The fewer occasions you enter the market the less chance you have of buying in at the average price of the market over a period of time - which might be good or bad.  It's exactly the same as trying to time the market ie. impossible.
Most people would recommend time in the market over timing the market.  If you agree with that then it should all be invested now.

dllive

Hmm. Ive just noticed that Vanguard only lets you setup regular MONTHLY payments. So I think Ill put in £1k per month over the next 6 months, and then if there are any noticeable market dips during then I will shuffle some extra in.

Albermarle

Probably into my LS100, FTSE All-World UCITS ETF (VWRL), or FTSE Global All Cap Index Fund Accumulation funds

All  these three investments are very similar .

Easier just to have one or maybe introduce a different type .

Thrugelmir

Catching falling knives is an art. Any trading day pricing anomolies will be picked upon by the institutional investors. Who are flush with cash.  

dllive

Albermarle said:

Probably into my LS100, FTSE All-World UCITS ETF (VWRL), or FTSE Global All Cap Index Fund Accumulation funds

All  these three investments are very similar .

Easier just to have one or maybe introduce a different type .

Yes, I agree. I tricked myself into thinking Im diversifying, but really Im just making things slightly more complicated.

Do you recommend any Vanguard funds as an alternative? I also own some U.S. Equity Index Fund, but I feel Im a bit over-weighted in the US market.

Billycock

dllive said:

Hmm. Ive just noticed that Vanguard only lets you setup regular MONTHLY payments. So I think Ill put in £1k per month over the next 6 months, and then if there are any noticeable market dips during then I will shuffle some extra in.

You pointed out in your first post that the 6K is already available as cash in your Vanguard account, it should therefore all be available to invest today if need be.
Investing 1K each month over 6 months actually voids your questioning about cost averaging before the end of the current ISA year.
Vanguard account opening options were/are-;
Open with a minimum £100 monthly DD and any further deposits thereafter £100 minimum
or
Open with a minimum £500 lump sum and no minimum deposits thereafter.