Investing a lump sum of money into an ETF vs monthly payments?

59 viewsOther

How does investing change between a lump sum of $10k in an ETF and then forgetting about it vs putting $1000/month? Are there any impacts except for time, of course?

Also if you put a lump sum, say 10K, and then decide to $1k/month on a monthly basis – what is that monthly investment “buying”?

In: Other

Anonymous 0 Comments

I’ll preface by stating I’m not an investment professional and this is not financial advice.

Generally speaking time in the market beats dollar cost averaging (spreading out payments through time). Of course you could get unlucky and buy at the peak before a crash but on the flip side you can miss out on some gains by leaving money on the table.

As for your second question, you’re buying “shares” of that ETF which you’re exchanging for dollars now in the hopes that those shares would be worth more than what you paid for them down the line.