Should I invest a lump sum or equally throughout the year?

1028. Laura answers a listener’s question about investing a lump sum or using a dollar-cost averaging (DCA) strategy. Find out what DCA is and its pros and cons whether you have a little or a lot to invest. Key takeaways Dollar-cost averaging (DCA) is a simple strategy where you invest a consistent amount at regular intervals. DCA benefits include reducing market risk, needing smaller amounts of cash, and making investing less emotional. DCA can also be a wise strategy when you have a large amount to invest, such as a cash windfall. The main DCA downside is potential missed growth when the market is rising over time. Making a lump sum investment can be wise when your finances are in good shape, don’t need to be systematic, have a high risk tolerance, and want to maximize returns. Discover more from Money Girl! Facebook Newsletter Transcripts available at QuickandDirtyTips.com. Email: [email protected] or leave a voicemail: (302) 364-0308. Hosted on Acast. See acast.com/privacy for more information.