Lump-sum investing

Investing a large amount all at once

In detail

Lump-sum investing puts a sum of money to work in one go. It is often compared with dollar-cost averaging, which buys in small portions over time. When prices keep rising, the lump sum invested early ends up ahead; when prices fall right after buying, the lump sum takes the bigger hit. Which turns out better is only known afterwards, so the choice comes down to how much price movement one can bear.

Example

Investing $1.2 million at once is a lump sum; investing $100,000 a month for 12 months is a regular plan.

Related terms

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For learning, not investment advice. Decisions are your own.

StockFit · TrueNorthLabs Inc.