When to do what: Dollar cost averaging or Lump sum investing

In this article we will be exploring, the pros, cons and when you should consider lump-sum or dollar cost averaging when implementing your investment strategy.

To support our analysis, we will examine the historical records from 2005 to 2020 for the world's index.

Lump Sum Investing

What is it: Investing an entire amount at one go?

Typical nature of analysis needed: Bottom-up approach

Pros:

• Most effective way of chasing returns if performed correctly

• Investment returns may be driven by market volatility or fundamental returns of underlying investments or both

• Suitable for all investment horizon depending on underlying strategy

Cons:

• If performed wrongly, may result in significant losses.

• heavily subjected to market timing

• requires technical knowledge and access to relevant information to a