10k invest all at once or dripfeed?

socratez

I will have 10k to invest in the next month, which I will split across 4 funds in my ISA. Am I better to deposit this money across the 4 funds in one go, or dripfeed it? If so what timescale shall I use to do this?

Albermarle

Same question is asked very regularly - this is the latest thread .
Investing large sum - drip feed or all-in? — MoneySavingExpert Forum

MK62

No way to know........drip feeding will ensure you won't get the worst return possible, but will also ensure you won't get the best either.....depends what is more important to you.

Notepad_Phil

Statistically you'd be better of by putting it all in rather than dripfeed - but statistics might not be the thing that helps you sleep at night, in which case dripfeeding might be better suited to you.

Thrugelmir

What's the minimum deposit into the funds? 

NedS

adindas said:

Notepad_Phil said:

Statistically you'd be better of by putting it all in rather than dripfeed - but statistics might not be the thing that helps you sleep at night, in which case dripfeeding might be better suited to you.

When talking about statistics it is important to see whether it applies to the current market condition, general market or specific market condition. The current market condition is the bear market.

<snip>

Really? I'm up 6% since the start of the year so I'd say you are probably invested in the wrong markets if you are down more than 20%

george4064

Statistically speaking, better off to invest it all in one go as soon as possible.

NedS

The last published update to my portfolio was here at end of Nov 2021:

https://forums.moneysavingexpert.com/discussion/comment/78787964/#Comment_78787964

I've trimmed a few positions and added to others since then, but the overall portfolio is similar, and is up 6% in the last 3 months

tebbins

Statistics very well summarised by PensionCraft here: https://youtu.be/DMznHFuGJr4

I'm not sure what Adindas is asking but main point is you don't know that this "is" a bear market, that the dip ytd is the start of a bear market, or if or when one is coming. You could ask what are the stats on periods commencing after a dip of 10% or more which are probably so common I doubt those data would be significantly different from the general rule that 2/3 of the time lump sum < drip feed.

That objective and general factor is quite different from the subjective and personal consideration of 'if this right for me'? If the markets dips further will you carry on buying or wait for my it to dip more? Will you stick to a strict schedule of purchase or wait and see how low you can buy each week/month? Will you regret buying high all-in-one when your portfolio dips 20, 30, 50%? Will you regret not going in all-at-once when you see what you would have bought rising 20, 30% while holding it?

adindas

@ NedS I am not quite sure what are you trying to show here. Did you compare the result of DCA and lumpsum during the bear market this year?? Did you show statistics proven that Lump sum beat DCA during the particular period of BEAR MARKET and uncertainty ??

@tebbins is Pensioncraft talking about DCA vs Lump-sum during the particular period of BEAR MARKET and uncertainty ?? Is he better than Warren Buffets. and other billionaires investor or strategist frequently aired on CNBC ??

Also the view is assuming there is not any additional trading cost of doing DCA every time you are adding your position which you could easily get it using near zero fees investing platform nowadays. If you use HL for instance of course it does not make sense of doing DCA, as your gain will be wiped by the trading cost £11.95 Per Deal. If you are using zero fee platform and allow fractional share, you could do DCA as low as $10 (or even $1) and it costs you almost nothing.

Here is another expert opinion regarding investing in the bear market which is specifically referring to DCA (e.g drip-feeding)

https://www.investopedia.com/8-ways-to-survive-a-market-downturn-4773417

jimjames

If it is a bear market then drip feeding over 3 months is unlikely to have any material difference to investing a lump sum. Look at 2002-3, you might have got lucky and invested in the dips but far more likely to have been at higher points.

Even splitting over 12 months would have been a mix above and below 9000. This also assumes you knew the future direction. If you have monthly income then investing monthly makes sense and that article suggests that you should continue through dips rather than stopping. If the market direction is generally up then investing lump sum makes sense. Whether it's better from a psychological perspective might be different.