Hi Anon, first, congrats on saving up so much! Definitely not a small feat for a student! :-)
As for DCA vs Lump Sum, in general, Lump Sum does beat DCA 66% of the time, when looking at a 1 year time frame. It makes sense if you think about it, because in general, markets tend to trend upwards. So, logically, if you have more time in the market, most of the time you'd win. So interestingly enough, while DCA is often used as a tool to help prevent timing the market, when you have a large sum to place into the market, DCA _IS _actually, timing the market haha.
But with that said, I do understand that starting as a beginner, it's tough throwing it all at once, especially in the volatile market environment that we're in right now. So if you choose to DCA and get your feet wet slowly, the difference at the end likely won't be too significant anyways. What's really important is that you get a feel for the market and to understand your emotions when investing. When I started out, even though I knew lump sum would likely outperform, I still split my money up and dropped it in every quarter haha. On hindsight, of course, it would have been better if I just lump summed it.
As for your broker question, since I've used both of these brokers before, I guess I'm qualified to comment. Even though IBKR is definitely cheaper in comms, I think it'll be cheaper to lump sum (or a few lump sums) in SC due to the inactivity fee of IBKR (unless you're expecting to have consistent income in school. You can always sell off and buy back in IBKR in the future when you decide to switch over!
Hi Anon, first, congrats on saving up so much! Definitely not a small feat for a student! :-)
As for DCA vs Lump Sum, in general, Lump Sum does beat DCA 66% of the time, when looking at a 1 year time frame. It makes sense if you think about it, because in general, markets tend to trend upwards. So, logically, if you have more time in the market, most of the time you'd win. So interestingly enough, while DCA is often used as a tool to help prevent timing the market, when you have a large sum to place into the market, DCA _IS _actually, timing the market haha.
But with that said, I do understand that starting as a beginner, it's tough throwing it all at once, especially in the volatile market environment that we're in right now. So if you choose to DCA and get your feet wet slowly, the difference at the end likely won't be too significant anyways. What's really important is that you get a feel for the market and to understand your emotions when investing. When I started out, even though I knew lump sum would likely outperform, I still split my money up and dropped it in every quarter haha. On hindsight, of course, it would have been better if I just lump summed it.
As for your broker question, since I've used both of these brokers before, I guess I'm qualified to comment. Even though IBKR is definitely cheaper in comms, I think it'll be cheaper to lump sum (or a few lump sums) in SC due to the inactivity fee of IBKR (unless you're expecting to have consistent income in school. You can always sell off and buy back in IBKR in the future when you decide to switch over!