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Tai Zhi
07 Jul 2018
Chief Investment Officer at Autowealth
There are some financial literature out there regarding whether an investor should invest all-in or time-diversify his/her investments over time.
Empirically, financial markets generally appreciates over time. Therefore, an investor faces material opportunity cost for not investing his/her full investible assets. The risk for an investor investing all-in is the small probability of experiencing a market correction immediately thereafter.
On balance, the benefits of investing all-in outweigh the risks. Therefore, the most rational, calculated investment decision will be to invest all-in.
That said, it also depends how well you can manage your emotions psychologically if in case the risks does materialise despite you taking a calculated rational investment decision.
If you feel more comfortable, you may want to commit 50% at the start and commit the remaining 50% over 2-3 quarters to mitigate the probability of meeting a market correction shortly after the initial 50%.
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I believe in not putting all your eggs in one basket. Maybe put half and the remaining in other instrument. Once you are confident with its performance, u can put more in that investment vehicle.