04 Aug 2020
I have always seen the discussion between investing in lump sum Vs DCA and lump sum seems to be better but that it assuming the person has a big amount to begin with.
However, what if it's the scenario that one do not have that lump sum but usually invest a portion of the income. Would it better for me to accumulate my investment portion in a savings account first before investing it at the 3 months mark to benefit from the lump sum method?
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13 Jun 2020
Senior Financial Services Manager at Phillip Securities (Jurong East)
As you have pointed out, lump sum is for someone who has a sufficient amount of capital. Even if you are accumulating over a period of 3 months or 6 months, given the nature of the long term trend of the markets, you are still doing DCA. In fact, RSP can be done quarterly instead of monthly for asset classes such as unit trust.
In the end, the important thing is to choose the right method for your preferences and have the discipline to follow through.
I wrote an extended answer regarding DCA vs lump sum which you can read here:
On Dollar Cost Averaging and Lump Sum Investing:
Like dieting, the best investment plan is the one you can stick to the long term. Most investment plans fail because they are not sustainable. Find which program works best for you which you can stick too, stay disciplined, and the results will follow.
We can never know what is a "start of a bull market" or predict any cycle or phase.
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