Part 1/8:
Investing a Lump Sum: Dollar Cost Averaging vs. Lump Sum Investment
When faced with a lump sum of cash intended for investment, investors often grapple with various strategies to enter the market. Two primary methods are commonly considered: investing the lump sum immediately or utilizing the dollar cost averaging (DCA) approach. Additionally, some individuals opt to defer investing until they perceive a more favorable market condition.
In this article, we’ll explore these strategies, their implications, and why understanding these options is essential for making informed financial decisions.