Asked on 20 Feb 2020
In current economic environment for coming one year, should i invest once for the lump sum or invest 6k per month?
Thank you in advance.
If you are investing with Autowealth, chances are that you would be investing into US markets. That said, the covid situation there is still very unstable and the upcoming US elections will affect the market to a large extent depending on who wins it. Hence, it would be best to DCA it. If you would prefer something less volatile, you could look at Singapore funds instead such as the STI ETF.
Hi Anon! It would be best to invest 6k per month as you leverage on the advantages of DCA. If you would like to find out more aout AutoWealth's strategies and if you have any pressing investment concerns, do consider arranging for a digital consultation with a wealth manager at AutoWealth to help you get started! This appointment is completely free, just check out their website. Investments would require an informed decision hence it's best to seek help from professionals too whenever possible. Good luck!
If you are worry about current situation, best is to go for DCA.
By doing DCA, you have better peace of mind and avoid emotion decision like sell off during downturn.
Before you start investing, it will be best to understand your objective. Here are some questions to help you:
What is your capital?
How will you want to invest your capital? E.g. lump sum or an amount on a regular basis
How long will you want to stay invested? E.g. 10 years
What is your risk appetite? E.g. How do you feel about short-term volatility?
What is your objective for investing?
To determine if the market condition is favourable to invest, the question will be: Is there a right time to invest?
Accordingly, I have compiled a list of financial crisis and disasters since the 90s and every other strong reasons not to invest. However, the market has proven otherwise year after year.
Therefore, focus with the right investment strategy by knowing your investment objective. Then decide the tenure and decide if a lump sum or smaller amount works. Also, invest into assets that suits your risk appetite.
On whether to invest a lump sum or to perform dollar cost averaging, it will be best to go back to your objectives. Moreover, this post may help you to understand the results from each strategy: https://www.blog.pzl.sg/dollar-cost-averaging-singapore-does-it-really-work/
All things considered, know why you are investing and how you are going to invest to reach your goal. Then, devise a strategy accordingly.
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