Dollar Cost Averaging vs. Lump Sum Investing (This works best)

Рет қаралды 9,730

Chris Palmer

Күн бұрын

Пікірлер: 38

@chrispalmer24 9 ай бұрын

Download the XTB App to start investing in Investment Plans: bit.ly/3UNncV6

@Abdul_Rahman86 8 ай бұрын

This is an extremely great video. Lump sum vs DCA. This is me personally. I’m 30, I don’t own a SS ISA. Just a SIPP. I only invest £500 per month because that’s all I can afford without compromising my lifestyle and happiness. If someone gave me £6k. I would 100% lump sum it and not invest for the year. If I came across £162k, I would again lump sum invest that into my sipp and not invest for the rest of my life and just let that compound, hopefully when I reach retirement there’ll be a sizeable amount.

@chrispalmer24 8 ай бұрын

Sounds great Abdul. I would opt for the SIPP too for sure. I really like you aren’t compromising your happiness which is so important. 🙂 sounds like you’ve got a great balance. It’s a good approach to just get it in there for sure!

@Blueskyuk 6 ай бұрын

Just come across your channel - you are a great communicator Chris and offer nicely balanced advice, combined with your own experiences. Look forward to more 😊

@rustyfeatherstone93 8 ай бұрын

Would you advise investing in bitcoin by dollar cost averaging or lump sum? Starting from $0. Thank you!

@chrispalmer24 8 ай бұрын

Definitely DCA anything from 0 personally :)

@rustyfeatherstone93 8 ай бұрын

@@chrispalmer24 thanks very much. Loved your videos!

@Tim_Bassett 8 ай бұрын

nice clear video Chris, and like most things it depends on a persons situation to find the best option....none of them are wrong, after all 🙂 This year I am averaging in to the ISA, for no other reason as we spent our spare cash on bathrooms 🙂 I like where you ended up - lump sum in, but then keep going.....think thats a balance of both worlds.

@chrispalmer24 8 ай бұрын

Thanks Tim appreciate it! Great plan 👍

@Gtbg641 8 ай бұрын

I’m fortunate to be able to add full isa amount and ponder this question each time. Years back I just decided to do both 10 k straight in and 10k spread equally over 10 months. This year I was a bit more reluctant to go all in with the 10k so decided to pound cost average the 20k in. But then I had a wobble and rather than doing this took the cash isa route full 20k in at 5.2percent. I calculated that the stock market would have to yield around 9-10% to match this risk free return according to my initial plan of pound cost averaging into the market with 1666 pound going in each month. I just feel the market is fairly high already so hence this approach. Does this make sense?

@chrispalmer24 8 ай бұрын

Not a bad option at all, you could also explore SIPP and Money Market Funds as other options. I actually opened a Cash ISA last year (as I skipped an ISA year) I've not have one in donkeys, but needed somewhere to park some cash. Annoyingly it's not a flexible one but it'll do for now.

@maccgordon8310 8 ай бұрын

Your comparison of cost averaging vs lump sum investing was going well until 10:30 when you lost me by introducing a third method called 'cash' without defining how the cash method funds a portfolio differently from the other two methods. I'm new to the terminology so I need it spelling out.

@lancegordon2829 8 ай бұрын

Am I right in thinking XTB do not offer an ISA?

@chrispalmer24 8 ай бұрын

Not just yet, they've been one to watch for sure. I just double checked with them for you :) "We are in the process of getting ISAs on our platform, just received our ISA license last month, so we're aiming or late Q3, hopefully for Septemeber. "

@jacoslapbass691 8 ай бұрын

Hi Chris, Do you ever have liquidity issues with your Vanguard Developed World ETF? I have the same one and it usually takes 7-14 days for my purchases to be completed. Quite annoying!

@chrispalmer24 8 ай бұрын

Hey Jacos! I haven’t it’s always gone through the next day. That seems odd it’s a huge fund. What platform are you on?

@jacoslapbass691 8 ай бұрын

@chrispalmer24 Thanks for the reply :) I see! I buy it through Invest Engine.

@jacoslapbass691 8 ай бұрын

@@chrispalmer24Oh, I see! I use Invest Engine.

@owencomley4395 8 ай бұрын

nice video man im 19 and started investing 1 year ago now all your videos are very helpful! i have seen the benefit of dollar cost averaging so i would definitely recommend. i have also just got a credit card to built my credit. i was wondering if you could do a video regarding credit cards and possibly go into detail about the benefits and talk about some reward cards.

@chrispalmer24 8 ай бұрын

Definitely something I’ve thought about! To be honest I’ve never even had a credit card (I’ve missed a lot of cash back which is a shame) so I’m looking in to them more and more

@Ratgibbon 8 ай бұрын

The Be Clever With Your Cash channel with Andy is a good info source of up-to-date credit card deals, bank account switching deals, best savings accounts, etc.

@owencomley4395 8 ай бұрын

@@Ratgibbon thanks man

@chrispalmer24 8 ай бұрын

@@Ratgibbon Yeah this is great, to be completely honest for specific information it's more out of date than I can actually keep up with, like the latest cash ISA rates I always suggest moneysavingexpert

@daveymac444 7 ай бұрын

I am wondering with this study, has it taken into account the fact that uninvested cash would still be gaining 5% interest in todays market? Would Lump Sum still beat DCA if the lump sum was sitting in a 5% interest account, and you gradually invested that sum in the market each month?

@pw3591 8 ай бұрын

0.36 seconds in "Super high interest rates" ?? I know you're quite young but interest rates are not super high in fact they are still well below the long term average. Rates since 2008 have been historically low. What's happening now is a gradual return to normality, that is extremely painful for some because of current debt levels.

@chrispalmer24 8 ай бұрын

Yes I get that, maybe “super” if you look in to it isn’t the right word. I think these are very good rates compared to what we’ve had for the last 10+ years though. 16 years ago I had the option of these sorts of rates but not seen anything like this since

@c40uk98 8 ай бұрын

My first mortgage rate was 14% in the uk ( and parentsdidn't bail you out bk then ), and it was on its way down at that point , If they would have left the interest rate around 5 to 7 % prices of houses and everything else' would not have gone through the roof . You get the picture.. My mortgage is paid i feel sorry for youngsters trying to get astart now.

@VegasMilgauss 8 ай бұрын

Time in beats timing. Period (or full stop for you Limeys).

@maccgordon8310 8 ай бұрын

As I dripfeed my £20K into my ETF ISA, I started by ignoring the market direction & investing periodically which I believe is cost averaging. Shortly afterwards, I introduced a simple rule - suspend investing into my ETFs that are going down and go-ahead with investing into my ETFs that are going up. Has this rule got a name & how successful will it be?

@maccgordon8310 7 ай бұрын

And the answer is ....reasonably successful. The cost averaging approach over 8 weeks was never going to beat the lump sum investment. Not buying as the price falls did help me buy the dip better and keep my average price lower. Cost averaging did allow me to vary my ratios depending on the ongoing performance of each ETF.

@rob_h_7 8 ай бұрын

Buy the dips

@kw8757 8 ай бұрын

Buy a crystal ball so you'll know when the dips are coming. "Buy the dip" is just another way of saying "time the market", proven not to work.

@rob_h_7 8 ай бұрын

@@kw8757 no need for a crystal ball. Instead of a set date each month to invest, just buy when it dips by x% and decide how much to allocate. Simple as that. That doesn’t mean I never buy when the last month has been pretty flat or has even had a slight increase, I’d probably just invest less.