10k invest all at once or dripfeed?

JakeHyde

adindas said:

When did you start your investment journey throwing lump-sum randomly. Is it during the bear market January this year or you are talking about the money which has been invested since long time ago ?? Anyway 6% is tiny. People who throw the money during the dip in March 2020 will see their investment on S&P500 up 100%+ today.

Ouch, I've been hesitating to take the plunge, but I wanted to invest in the SNP500.
So you're saying it went up 100% today?!! 🙈

I saw a vid on youtube where they did the calculations and indeed DCA could potentially make a higher return.

I want to max out my ISA before the 5th, so I have no option but to drop a lump sum.  You seem to know a lot more than me about this kind of thing. Do you think the SNP is still a good place to start, or would you suggest global markets or something else?  😇😅

NorthernJoe

JakeHyde said:

adindas said:

When did you start your investment journey throwing lump-sum randomly. Is it during the bear market January this year or you are talking about the money which has been invested since long time ago ?? Anyway 6% is tiny. People who throw the money during the dip in March 2020 will see their investment on S&P500 up 100%+ today.

I want to max out my ISA before the 5th, so I have no option but to drop a lump sum.  

Most S&S ISAs allow a cash deposit which you can invest later.

No harm in putting in 10k before the deadline & leaving it there until you figure out what you want to do 

adindas

JakeHyde said:

adindas said:

When did you start your investment journey throwing lump-sum randomly. Is it during the bear market January this year or you are talking about the money which has been invested since long time ago ?? Anyway 6% is tiny. People who throw the money during the dip in March 2020 will see their investment on S&P500 up 100%+ today.

Ouch, I've been hesitating to take the plunge, but I wanted to invest in the SNP500.
So you're saying it went up 100% today?!! 🙈

I saw a vid on youtube where they did the calculations and indeed DCA could potentially make a higher return.

I want to max out my ISA before the 5th, so I have no option but to drop a lump sum.  You seem to know a lot more than me about this kind of thing. Do you think the SNP is still a good place to start, or would you suggest global markets or something else?  😇😅

Well, i am not quite sure whether this is a joke, but anyway reread it did not say S&P 500 went up 100%+ yesterday. I said people who invested during during March 2020 will see their fund up 100%+ yesterday.

Regarding max out my ISA before the 5th, well you have option to preserve by put it into flexible ISA and then after April 6, move it to higher interest RSA or saving account waiting allocation for DCA in equity. I answered in the other thread.

"If you want to preserve your ISA allowance this tax year, and do not want to throw lump sum randomly into the stock market, what you could do is to put the rest of your ISA allowance in the flexible cash ISA before April 6, 2022. There are a few flexible cash ISA available such as HSBC, and NW ISA. After April 6, 2022 your ISA allowance will be reset with a new ISA allowance and the cash ISA you put before April 6, could be moved to higher interest paying RSA or saving account. You could transfer this cash ISA anytime back to flexible ISA any time within this 22/23 tax year when you need allocating it to S&S using ISA a formal ISA transfer request.

But of course you will need to do your own DD and decide whatever the best course of action for you. We take our own gain but we also need to take our own loss if it ever happens. "

NorthernJoe

adindas said:

"You could transfer this cash ISA anytime back to flexible ISA any time within this 22/23 tax year when you need allocating it to S&S using ISA a formal ISA transfer request."

Not all ISAs allow transfers in. Given the paltry rates on most cash ISAs, the benefits of will likely be minimal if such moves are short term

Possibly better for OP to go with their (low cost) investment platform of choice, park the cash there and to do some additional research if agonising over this particular decision 

The whole thread otherwise hinges on whether we are in a "bear market" or the beginning of an upturn following the recent correction. That can only be answered confidently in retrospect 

adindas

NorthernJoe said:

adindas said:

"You could transfer this cash ISA anytime back to flexible ISA any time within this 22/23 tax year when you need allocating it to S&S using ISA a formal ISA transfer request."

Not all ISAs allow transfers in. Given the paltry rates on most cash ISAs, the benefits of will likely be minimal if such moves are short term

Possibly better for OP to go with their (low cost) investment platform of choice, park the cash there and to do some additional research if agonising over this particular decision 

The whole thread otherwise hinges on whether we are in a "bear market" or the beginning of an upturn following the recent correction. That can only be answered confidently in retrospect 

I agree for £10K it is not worthy an effort, if you have not got flexible ISA ready and still need an effort to apply and register for online banking. But I myself have done that as I already have all of these accounts ready and just a matter of move it into flexible ISA and just need stay one day before moving it out again to other saving accounts.

For for those who are having £100k+, like we see on the other threads it is worthy while waiting allocation to DCA to equity. After April 6, 2022, they could move it to RSA or to Chase Bank easy saver 1.5% chase bank. Some RSA easy access are paying 1.5%+ interest nowadays.

Notepad_Phil

adindas said:

...

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

If that is correct, then why should anyone hold onto their currently invested portfolio? If DCA gives you a better overall entry price then they should sell their investments now and then buy them back using DCA.

adindas

Notepad_Phil said:

adindas said:

...

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

If that is correct, then why should anyone hold onto their currently invested portfolio? If DCA gives you a better overall entry price then they should sell their investments now and then buy them back using DCA.

I will let you figure it out yourself and do the math. But the clue here is that No strategy ever suggest to sell good blue chip stocks or a well diversified fund at a loss just because you are already down say 10%+ and buy it back again at cheaper price (IF YOU WERE LUCKY). If you read saving and investment sub-board some people are already down 30%.

If you already down say 10%, you will need your fund/stock to go up 11.11% just to restore your10% loss.

If you already down 30%, you will need your fund to go up 42.85% just to restore your 30% loss.

Notepad_Phil

adindas said:

Notepad_Phil said:

adindas said:

...

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

If that is correct, then why should anyone hold onto their currently invested portfolio? If DCA gives you a better overall entry price then they should sell their investments now and then buy them back using DCA.

I will let you figure it out yourself and do the math. But the clue here is that No strategy ever suggest to sell a good blue chip stocks or a well diversified fund at a loss just because you are already down 10%+ and buy it back again at cheaper price (IF YOU WERE LUCKY)

But that is exactly the logical conclusion of your post about DCA. Sell your investments now at price x and then use DCA so that you buy them back at less than x.

E.g. I see no logical difference between having a  £10,000 lump sum in cash or having a portfolio of investments that were once worth £15,000 but are now only worth £10,000  - if you believe that DCA will result in a statistically better performance than a lump sum then you should sell and then rebuy using DCA.

P.S. I don't believe that DCA is better than a lump sum, so I would never do this.

adindas

Notepad_Phil said:

adindas said:

Notepad_Phil said:

adindas said:

...

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

If that is correct, then why should anyone hold onto their currently invested portfolio? If DCA gives you a better overall entry price then they should sell their investments now and then buy them back using DCA.

I will let you figure it out yourself and do the math. But the clue here is that No strategy ever suggest to sell a good blue chip stocks or a well diversified fund at a loss just because you are already down 10%+ and buy it back again at cheaper price (IF YOU WERE LUCKY)

But that is exactly the logical conclusion of your post about DCA. Sell your investments now at price x and then use DCA so that you buy them back at less than x.

E.g. I see no logical difference between having a  £10,000 lump sum in cash or having a portfolio of investments that were once worth £15,000 but are now only worth £10,000  - if you believe that DCA will result in a statistically better performance than a lump sum then you should sell and then rebuy using DCA.

P.S. I don't believe that DCA is better than a lump sum, so I would never do this.

Your logic is woefully flaw.

I repeat this please re-read

"No strategy ever suggest to sell a good blue chip stocks or a well diversified fund at a loss just because you are already down 10%+ and buy it back again at cheaper price"

And of course people could always believe in what they want to believe, including if they believe that they are better than Warren Buffets, other Billionaires investors, or investment strategists. We are not here to convince people.

And in your previous post "Statistically you'd be better of by putting it all in rather than dripfeed" please show any link to this statistics showing that this hold true during the bear market and a lot of FUD.

At the end of the day we take our own gain and we take our own loss.

Notepad_Phil

adindas said:

Notepad_Phil said:

adindas said:

Notepad_Phil said:

adindas said:

...

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

If that is correct, then why should anyone hold onto their currently invested portfolio? If DCA gives you a better overall entry price then they should sell their investments now and then buy them back using DCA.

I will let you figure it out yourself and do the math. But the clue here is that No strategy ever suggest to sell a good blue chip stocks or a well diversified fund at a loss just because you are already down 10%+ and buy it back again at cheaper price (IF YOU WERE LUCKY)

But that is exactly the logical conclusion of your post about DCA. Sell your investments now at price x and then use DCA so that you buy them back at less than x.

E.g. I see no logical difference between having a  £10,000 lump sum in cash or having a portfolio of investments that were once worth £15,000 but are now only worth £10,000  - if you believe that DCA will result in a statistically better performance than a lump sum then you should sell and then rebuy using DCA.

P.S. I don't believe that DCA is better than a lump sum, so I would never do this.

Your logic is woefully flaw.

I repeat this re read this

"No strategy ever suggest to sell a good blue chip stocks or a well diversified fund at a loss just because you are already down 10%+ and buy it back again at cheaper price"

I just took your post that DCA would be better than a lump sum to its logical conclusion which would imply that you should sell and reinvest back in via DCA

E.g. say we have have three people:

SellAndReinvest has a portfolio that at one time was worth £15,000 but is now only worth £10,000. They sell it (for whatever reason) and get £10,000. They then have second thoughts. Should they invest it back in one go or should they invest it via DCA?

HasCash has £10,000 in cash. Should they invest it in one go or should they invest it via DCA?

KeepHolding has the same portfolio as SellAndReinvest but has decided to just stay invested.

If you say DCA for HasCash then surely you would also say DCA for SellAndReinvest given that you believe that DCA will give better results from their starting position of having £10,000 in cash. But it seems as though you would say that SellAndReinvest should do a lump sum as that would put them back into the same position as KeepHolding as you believe they should have just kept invested.

So it appears that you believe that DCA is the right way to go if they have cash, but only if they hadn't got that cash by selling from their portfolio. How does it matter how they got that cash? The fact that the portfolio was at one time worth more has no impact on their current position, the market has no memory and no idea that you are whatever percentage down. If DCA is right then it should be right under both circumstances.