Drip-Feeding vs Lump Sum Investing

Traditional investment wisdom is that you should drip-feed small amounts of money into the market over time rather than invest a single lump-sum. But investors may want to rethink their strategy

Tom Lauricella 21 November, 2019 | 10:14AM

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For investors, there are fewer more nerve-wracking moments than deciding how to invest a big cash windfall, the kind that might come from the sale of a business, an inheritance, or a hefty bonus.

The instinct among many individual investors is often to gravitate toward pound-cost averaging (PCA). This is the method of drip-feeding your money into the market, investing a little at a time and has become conventional wisdom.

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Tom Lauricella  is Editor of Morningstar Direct

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