Lump Sum Investing vs Dollar Cost Averaging: Best Method Explained 

I literally was curious about it this morning… and here you are with the video. Fantastic work, thank you!

Great video Damo, really great explanation of something that can be a really tough decision. I’m a bit late to the party, as unlike some other finance videos I watch while doing something else or listening like a podcast, I really want to make time to watch yours without any distractions. A real event! I have another 2 in my feed to watch and always excited to see when you post another, keep up the good work.

Thanks again Damian! Love your content. Please keep it up!

As always great video. You hit it out of the park

One of the things that caused such confusion and conflict during the COVID-19 pandemic is that statistics are not easy to interpret. I love how you make the subtleties so easy to understand, even for someone like me with the financial attention span of a very tiny gnat. Thanks Damo 👍

Great video - thanks. Love the quality of your production.

I absolutely love that ending 😂

I love Damiens channel......its like talking to your well informed mate who's got your back.............another top video

Great work bro, some really solid facts and research! Carry on creating these masterpieces. ON THE UPPPPP Take it steady mate Chay

Answered my question with this video thank you! So glad I came across your channel and even better with humour and being UK focused :))

Great video as ever mate! Thanks for reading all the boring stuff and making it interesting 👊😁👍

Great answer to the age old question! Very insightful and evidence based, can always trust you to back up your opinions. Very well explained, keep up the great work my friend!

Another great video! Thanks for teaching me the concept of loss aversion - very informative!

Love all the memes and clips in this video, the Anchorman one with Paul Rudd is legendary! Lump sum for the win, build your conviction in what you're investing in, get your money in and let it do it's thing long term.

Great piece of finacial insight - u have a knack for picking subjects uppermost in peoples minds

Love the video!! I always wrestle with this, dump and run or sprinkle and watch!? Neither is perfect and we just don't know what's around the corner and it's that aspect we should try and make peace with. The markets tend to recover as history has told us, so invest as soon as available and don't look back. Index fund investing certainly dampens any next day tank regrets. When I first started investing I would only buy single stocks and to watch them tank the day after purchase is awful!

This was a damn good video, Damo 👏

I am glad you are back Damo!! Great Video as always! I have started investing this year and so far more often it is in red than in green. I try to top up my Vanguard investing monthly, and it is much easier for me to manage this way. I know it is a long run, it is the marathon not a sprint, but would be nice to see some green ;)

Great Video!

Hey man. Really like your editing style. Definitely engaging. What track do you use at 0.21?

Great video, thank you.

cheers for this Damien

Great and controversial point!! having same feeling, better in and manage the feelings on first year...

Another great video carol, would love to hear what exactly you would throw your windfall into? Stocks? Etfs? Bonds? Crypto?

The lion king clip gets me every time!

Hi Damian, pretty new to your channel but this video was very helpful and I wish I’d listened to it last year… I invested the majority of my savings into funds right before the markets tanked, so yeah it’s been a rough year haha. Since then I’ve saved most of my money but am considering getting back into DCA investing (after being scarred from my previous lump sum strategy). Can you recommend some good vanguard funds to invest in? You mentioned in this vid that if you had a lump sum you’d put it all in the market no bother. Which funds would you invest in?

Love your context and persona young man!😁 Keep it going now 😁

I lump-summed the remaining 18k into my S&S isa (VLS60!) in early april after starting my investing drip-feeding £500 for the previous four months and now wished i'd carried on drip-feeding! Your previous video on 'the lost decade' (when long term investing is not long enough!) would suggest that in a bear market drip feeding is best! I realise youre not making a prediction, so no disrespect, and your videos are very helpful. I'm investing for 10 years so if it was the case that the next decade was like the 1970's would i be better bringing my lump-summed money back to cash and begin drip-feeding again? I have, however, started drip-feeding this years S&S isa allowance! Thanks and keep up the good work!

Wicked analysis

Thanks for another brilliantly put together video.... btw I went very much LSI on tsla because the fear is so high, and putting more in as we slide down. So this is LSI + DCA? :D

Really great video Damo!!! Lots of conversations going on around DCA at the moment given the volatility in the market. You mentioned averaging by making a contribution from a salary on a monthly basis. One question I had was whether this is a good approach or is it better to save and purchase funds on a quarterley basis, reducing any transaction fees but still over a long time horizon effectively average out?

Great Vid as always Damo!!! On a slight tangent does investing in a number of different ISA’s make a difference to the overall gains over time. For example if I have invested £60k in VUSA Vanguard fully maxed allowance this current tax year & over the next three years open another ISA VUSA on Freetrade and put in £20k each year for 3 years to max my ISA compared to adding the same amount to the same ISA? Hope that makes sense. Trying protect against any problems with companies going bump as the guaranteed amount is £85k (FCSA)

Thanks Damo. another vid I can understand. Glad you mentioned about the monthly payments as was wondering about that.

Informative as ever....just need the lump sum now 😉

My man, your research is always so thorough. I gain a new perspective every time your video hits!!

Legend!!!

Hello Damien, another very helpful video. Love your entertaining, no nonsense advise/opinions backed up with good solid analysis of data mixed with a touch of the real world. So I'm 56 have 10k and looking to invest. Given I know bugger all and could drive myself mad or into inaction trying to be clever, I'm pretty sold after this on just banging it all into an index linked so all good so far. I then have around 200 to 300 amonth spare to invest, so my question is can I lump some and the top up that fund monthly, or do I need to have another fund to do that in So affectively lump some and then DCA or one lump. some fund and a separate DCA fund. I've heard lots about doing one or the other in a fund but not both. Also can you have more than one fund in an ISA or does it have to be separate ISAs per fund. Any help would be much appreciated thanks

I put some money at the start however now I have a direct debit set up every month - whatever people choose, long term it will be better than the banks which is offering nothing for saving. Happy investing people

Another high quality, information and humour filled video (60% 40% split i’d say). Keep up the great work and did anyone win the £100 for the ABBA themed video of getting all the song references in the right order?

DCAing definitely feels better psychologically. Even though lump sum investing tends to outperform. For example, I started my Roth in 2019, and for the first 3 years i averaged $500/month to max it out at the end of the year. But this year, i chose to lumpsum and maxed it out in the first 2 months. With this recent 20% drawdown, I feel stupid for investing all my money at the all time highs for VTI. I know 30 years from now, it;ll probably not matter, bc time in the market beats timing the market. But right now, in the short term psychologically it sure feels crappy lol.

Don't mind me, I'm just recovering from a heart attack that the shark clip just gave me in the video. 😩🦈

Great video...just a quick question. Can we buy I bonds on the US treasury direct website if we are from the UK? If not were can we...Vanguard?? Plus will we get the same high interest ? Thanks in advance 👍

When talking about time frames, how would you define short term vs ling term? Thanks

I went 50/50 - put half of my cash in as a lump sum and DCA’d the rest. Knowing my luck I’ll have ended up with worst of both worlds rather than the best!

Thanks so much Damien, I respect your view, always well informed and balanced. I am in exactly the situation you describe right now as I have just received my pension lump sum (lucky me eh). I worry that my indecision is burning my cash via the inflation monster but am a bit paralysed by the predictions that the markets are going to dip. Have maxed my ISA and invest regular on a monthly basis but remain anxious about dumping the rest in the market...arrrrgh!

If you have a lump sum which will only ever be used for investing (not paying for living costs/ needs) does inflation impact it? Presumably the only consideration then is the markets. In times of volatility I prefer DCA and think inflation can be ignored (provided the lump sum is only for investing). Does that sound about right?

For me you are the GOTO guy on YT. PS are you a millionaire yet ? No! This time next year ....?

I like this

I yeeted all my dosh into growth stocks at the peak, now I’m down over 50%😎 Time is on my side tho, nice vid my man

Hi Damien Do you know what sites offer the best sign up rewards for depositing? Also a good place to stake. I have solana and a bit of Bitcoin so I’m basically looking for a nice sign up reward for depositing and also looking to accumulate while hoddling both Bitcoin and solana

I think this is based on your appetite for risk and whether or not your mentally/psychologically ready to put a lump sum in at once and watch it go down. Even if you are in it for the long haul, it can still play tricks with your mind. That's why DCA is probably the best approach for 99% of people because they do not have their emotions in check.

Love the vid, love the music at the end. Vid about pensions? Probs not most interesting subject but idk how they work lol

What about transferring isas from one provider to the other, when they don't have compatible funds and your forced to sell. Do you sell from the 1st provider and materialize all the profits/loses, and then reinvest everything in the new provider? Or you keep different isas and start with a smaller portfolio/stash in the new provider? Thanks

great video but the ending sort of left me confused. What is DCA? If i have $1200 and put all of it in April then that's LSI. If i put $100 each month then that's DCA, correct? You seem to suggest that consistent investing monthly is also LSI? Please clarify

Plot twist, Keith from Kansas has a pet shark. 🦈 Great video mate. For me, I’m all in and ignore the noise but that ain’t for everyone.

Lump sum. If in smp500. Time in the market beats timing the market.

For me in a long term investment just buy the support and hodle. If the market tanked and i was still invested long term then i would DCA to reduce my 1st buy in price. if i bought at .02cent and the price was now $1.30 why would i need to DCA unless i never went balls deep.

Problem is all these so called financial experts contradict each other - I've watched a video from Ben Félix saying lump sum investing yields better results in the end and others are saying the opposite

#1 strategy - Buy the dip !!! In the Fed we Trust.

I regret not putting a lump sum in during the crash in 2020. Now I am patiently waiting for the market to drop again.

Why should I invest in a S&S Isa with Vanguard when I want to invest in individual stocks too, considering I want to invest in them monthly? Is it better to just invest all in one place?

Some people don't have all their investment money in a lump sum... They need to earn it over time.

I'm with you on that.... YEET

Lump sum if it’s dividend stocks, higher reinvestment

In this market - investing all at once is very risky

How about this for a strategy: invest the first half straight away, and DCA the second half !

Great stuff Damien. Only just realised Ant-Man is in Anchor Man!!!!

I dollar cost average not because I want to but because I have to, if i had 100,000 or millions in my account right now, id utilise it through vanguard

If you had a big sum but you invested 20k per year into an ISA instead of all in one go. Would the tax savings make it better than investing it all in one go?

What no ABBA puns 😂

But if I have say £30k to invest , why not invest it all at once? Set and forget. If I DCA it phase it in every month say £200 per month that's £2500 per year, the £27,500 which left in the account is getting eaten by inflation, right?

Treasures in Heaven Matthew 6 NIV 19 “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. 20 But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also. 22 “The eye is the lamp of the body. If your eyes are healthy,[c] your whole body will be full of light. 23 But if your eyes are unhealthy,[d] your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness! 24 “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money. Do Not Worry 25 “Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? 26 Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? 27 Can any one of you by worrying add a single hour to your life[e]? 28 “And why do you worry about clothes? See how the flowers of the field grow. They do not labor or spin. 29 Yet I tell you that not even Solomon in all his splendor was dressed like one of these. 30 If that is how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you-you of little faith? 31 So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For the pagans run after all these things, and your heavenly Father knows that you need them. 33 But seek first his kingdom and his righteousness, and all these things will be given to you as well. 34 Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.

Man I just looked at Netflix that's a big decline

If lump sum strategy makes more money when market is trending up in the long term, it means it will lose more money when market is trending down in the long term. It is 2022, I would reserve some cash to buy the dip rather than go all in.

Before dumping your money into the market, make sure you know where you dump it into as well.

Hey mate, I’ve been investing into Vanguard LS80 since 2017 and now have more than the £30k which is over the yearly ISA limit and I have 2 questions. 1. I like the LS100 but my worry is that if I sell all my LS80 funds and invest it all into LS100 would that essentially mean that I’m starting from scratch? Meaning that I will be a lot more affected if the market goes down as my unit prices will not be lower? 2. If I sell my LS80 fund and transfer the ISA to Trading212 as my ISA is over £20k what would happen to the £20k yearly limit and would I be able to invest more this year? Loving your videos and it’s great to see how the market has changed over the past 5 years of me not doing any more research!

This obviously is true, but one also has to at least evaluate the conditions of the market right now. The chances that tomorrow the war is over and inflation goes down are extremely slim, the tendency is to go down, so for now DCA seems the best approach. If one had "normal" conditions then I would Lump Sum. I lump summed at the end of last year and it has been quite bad, but it was impossible to predict the future, but now I am not doing that because of the war, cost of living, etc

Lump sum and don't look back!

your content is always 10/10

I spread out investments as thin as Marmite on toast.

Phew.... Starting to worry where you'd got to young man....

Out of curiosity... Is it just me thinking it or you've been a bit quite recently? Anything boiling in the pot for us?

Keep an eye on events developing that could affect the markerts. Get ready to invest do when crash comes, you in it to win it. The rest of the time follow DCA.

Damien just made everyone a lego head :D ... not far from truth in current markets, lol

Problem is, look at the S&P 500, its exponentially gone up in the last two years, unlike any other time. Now, I bought in December 2021, Peak, its now tanking, but how far, the market is high. Now, consider a USA and West who's never held so much debt, a USA being run by a wrecking ball nutter, a USA losing its currency hegomany to the East. Ask yourself is the North American markets going to return the next 10 years, or fail like never before? What is happening now is like no other time

Cheers fella, absolutely has to meet your risk tolerance. Get video as always.

With your example of knowing where the market will go and then the market over shooting why would you continue to invest? Obviously it's hypothetical but its still like if you have a target price of 1k for tesla but deciding to invest when it's 1.2k, that's just irrational if you think it's not worth that much.

first

Rafiki yeeting Simba caught me off guard haha! Solid advice as always Damo.

All at once if prices are low, bit by bit if prices are high?

Another view: swimming with sharks makes you expert, therefore less likely to be bitten by shark :) Thank me later

I’m losing 4.11% on my 80%lifestrategy

Hey mate. We need your contact for sponsored paid content. Cheers ;)

I'm taking a strange route...not sure if it's wise or foolish...half invested...half encashed which drips in weekly DCA 🤔...looking at how volatile market is....with no respite... Also, I've some up with some logic...if market dips a certain percentage...I increase weekly amount by same proportion...or continue with that fixed amount Keep up the good work Damo and keep it light..

Good one Damo and for me personally it's DCA. That fear of a big negative after a big investment makes it easier for me to drip feed in and buy more on the dips. Saying that though I still kick myself when a small purchase of a new company goes a bit south!!

Man I just lump sum cuz I'm too lazy to keep checking things monthly and that. But my investment plan is to hold in life strat for the next 35 years since I'm only 23 now got a long time before I will actually need the money

No bother!

Put it in the market & lock it away, you know you'll only spend it otherwise...😉

Is there a study that shows the best returns between investing in the stock market or chucking it down a wishing well?

Don't you mean Pound cost averaging,you're British.