facebookIs it better to one lump sum into robo advisor instead of starting it off with DCA? Because i started with DCA strategy instead of lump sum. - Seedly

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Derrick Chew

07 Jan 2022

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Robo-Advisors

Is it better to one lump sum into robo advisor instead of starting it off with DCA? Because i started with DCA strategy instead of lump sum.

Discussion (8)

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Dca is better to spread the costs over time rather than timing the market and buying only when the market is

Robin

09 Feb 2022

Administrator at SG

If you want to lump sum, you may be better off using a brokerage and lump sum into low cost ETFs. Robos charge platform fee of average 0.6% per annum. This amounts to $600 per year of fees for parking your 100k lump sum.

Lump sum usually gives better returns than DCA. If you have excessive amount have funds sitting in bank and not invested, the returns on that portion is very low.

I have both! Under the same robo same profile, but enter at different time (1 year apart, DCA first). I would say lump is good if you entered at a low point (but no one can really tell) and/or you intend to hold for a long long long time (ie spare spare cash). DCA is just good discipline to continously invest so that one won't miss the low point(s).

Robin

24 Jan 2022

Administrator at SG

Robo charges you based on "parking fees" rather than per transaction fees like what brokers do.

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