facebookIs it better to park a lump sum from CPF in Endowus for investment or do a recurring sum (DCA) per month from CPF into the investment? - Seedly
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Mel

Posted on 25 Jul 2020

Is it better to park a lump sum from CPF in Endowus for investment or do a recurring sum (DCA) per month from CPF into the investment?

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2 answers

Discussion (2)

Sharon

Sharon

Level 12. Master

Updated on 27 Jul 2020

I parked a lump sum from CPF in Endowus for investment, since I'm still paying the housing loan. I didn't do DCA.

I set aside about 4 years of funds left in CPF-OA for repayments to the bank, in case I lose my job.

4 years period sound overkill, but I rather be careful because after the lock-in (the "honeymoon") ends, who knows what rate/amount I'm going to pay when the time comes.​​​

2

Mel

28 Jul 2020

Thank You!

Mel

06 Aug 2020

4 years of funds is a lot

Post

Hi Mel,

Thank you for your interest in us! There are a few factors at play including

  • What is the lump sum amount you have in your CPF

  • What is recurring amount you can invest in your CPF

When I first started out, I spread out my "lump sum" into 3 smaller lumps, then I have been doing a $1k+ recurring investment on a monthly basis. Hope this helps!​​​

2

Mel

06 Aug 2020

Thank You! I see. But what is the pro and cons of lump sum and DCA then in this context for CPF?

Shengshi Chiam, CFA

Shengshi Chiam, CFA

07 Aug 2020

To put it briefly, when you do lump sum, you have more money invested, so you should be able to grow you wealth more quickly. When you spread it out and dollar cost average, you have less money invested, but in the case that the market goes down over the period that you spread out your investment, you are buying cheap. In the end no one knows for sure where the market is heading, it is best to have a plan and stick to it imo.

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