facebookIs it better to put a recurring sum for StashAway or Endowus (after initial 10k)? Or park a lump sum? - Seedly

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M

Mel

Level 4

22 Jul 2020

βˆ™

Robo-Advisors

Is it better to put a recurring sum for StashAway or Endowus (after initial 10k)? Or park a lump sum?

Discussion (4)

What are your thoughts?

Shengshi Chiam, CFA

Shengshi Chiam, CFA

21 Jul 2020

Level 10Β·Personal Finance Lead at Endowus

Hi Mel,

It is best to invest consistently based on your financial goals rather than let cash accumulate and put in money into the market lump sum.

Because it is innately difficult to time the market, and the market over the long run gives higher returns, it is safer to stick to your investment goals and invest consistently.

Some of the exception to this rule includes being unable to work, having a sudden huge short term monetary commitment that you need to look out for. Else it is better to invest consistently to get a long term market returns.

Hope this helps!

Theoratically, it is better to put a lump sum when the prices are low so you earn any interest gained on your entire capital.

Practically, when do you put your money in? It's impossible to know when the prices are lowest before they go up unless you're doing insider trading.

Thus the more conservative option is usually dollar cost averaging cause the market tends to trend upwards so you're going to earn in the long term (eg 10 years later)

View 1 replies

Hi Mel,

I'm no expert myself but the best advice I've been given so far is to dollar cost average: ...

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