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Anonymous

18 Apr 2019

General Investing

Should I do dollar averaging cost or lump sum investment on specifically REITs or high dividends equity?

Discussion (3)

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as a beginner (myself), I do averaging cost because it required lower cost. It means that if something really happened, I lose money but lose the part that im afforardable. Probably by the time my investment knowledge is sufficient, I would like to try lump sum investment because it give better result compared to monthly distribution.

I tend to favour a DCA approach. I came across the research on Vanguard myself and, after much hesitation, did a lump sum investment in REITs and other equity ETFs. This was in January 2018, just before the market dropped.

In the 2 out of 3 times that you do a lump sum investment and you do produce better results, you'll be happy of course. The question is: Can you stomach the sharp losses incurred after your lump sum investment if the market turns south for you? We are talking 8-10% here, more than what your REIT would pay you in a year or two. If you are not prepared to face this, then psychologically you are better off doing the DCA approach. So personally, I feel it's important to factor in how you would feel based on a negative outcome from doing a lump-sum investment.

Luke Ho

08 Jun 2018

Founder and Director at CFX Money Maverick Pte Ltd

So lump sum investments were analyzed by Vanguard to produce better results 2/3 of the time. And thi...

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