Investing Large Sum for 10 Years+ Any Advantage to Spacing Out Investment?

optimusgrime

Hi Guys,

I've a biggish lump sum in my pension to invest for the the next 10-20 years.

I'm planning on investing in a bunch of basic ETFs which, short of something dramatic happening, I'll be liable to leave alone for 10-20 years.

Just wondering on what's people's thoughts are in terms of buying the funds all at once, at today's rates, vs investing over a period of time?

I could keep the whole lot on deposit and buy x amount of the funds every month for a year or so to have something of a dollar cost averaging effect.

Not sure if there are any advantages to this, but perhaps some wiser minds might give their thoughts on this also, need to make a decision with it in the next couple of days.

Just to say I'm rather occupied with my day work so am looking for a simple solution for this, so unless there is a very compelling reason not to buy in all at once, that would be my preferred option.

Thanks in advance!

call_me_early

optimusgrime wrote: »

Hi Guys,

I've a biggish lump sum in my pension to invest for the the next 10-20 years.

I'm planning on investing in a bunch of basic ETFs which, short of something dramatic happening, I'll be liable to leave alone for 10-20 years.

Just wondering on what's people's thoughts are in terms of buying the funds all at once, at today's rates, vs investing over a period of time?

I could keep the whole lot on deposit and buy x amount of the funds every month for a year or so to have something of a dollar cost averaging effect.

Not sure if there are any advantages to this, but perhaps some wiser minds might give their thoughts on this also, need to make a decision with it in the next couple of days.

Just to say I'm rather occupied with my day work so am looking for a simple solution for this, so unless there is a very compelling reason not to buy in all at once, that would be my preferred option.

Thanks in advance!

you only need two etf,s to do the job

VTI = vanguard north America , mostly large cap but around 10 % medium and small cap
VEU = everything outside north America with the majority being Europe

you might also want to go with a specific emerging markets fund , id recommend DEM ( wisdom tree ) , vanguard do a lower cost one ( VWO ) but wisdom tree have an excellent fund in this sector , if your investing a small amount , its better to just invest all at once as commission will be a higher percentage of your capital

optimusgrime

Thanks for the advice.

Even if I were to invest once a month for 12 months the sums involved would be pretty big and the percentage of commission would be pretty minimal.

Fees aside, is there any major advantage to spacing out the investment over a year or so that I'm missing out on?

gordongekko

optimusgrime wrote: »

Thanks for the advice.

Even if I were to invest once a month for 12 months the sums involved would be pretty big and the percentage of commission would be pretty minimal.

Fees aside, is there any major advantage to spacing out the investment over a year or so that I'm missing out on?

Well the market could collapse and you will be able to average down or the price could increase and you lose out.

when im investing a decent sum in a share this is the way I invest. You need to remember you will never get in at the bottom or out at the top.

I'm happier to be half right and half wrong all the time.

aidanki

call_me_early wrote: »

you only need two etf,s to do the job

VTI = vanguard north America , mostly large cap but around 10 % medium and small cap
VEU = everything outside north America with the majority being Europe

you might also want to go with a specific emerging markets fund , id recommend DEM ( wisdom tree ) , vanguard do a lower cost one ( VWO ) but wisdom tree have an excellent fund in this sector , if your investing a small amount , its better to just invest all at once as commission will be a higher percentage of your capital

a bit new to funds, how can I see the performance of these over the last number of years ?

call_me_early

aidanki wrote: »

a bit new to funds, how can I see the performance of these over the last number of years ?

http://finance.yahoo.com/q?s=VTI&ql=0


http://finance.yahoo.com/q?s=VEU&ql=0

http://finance.yahoo.com/q?s=DEM&ql=0

simongurnick

I think you need to consider that the markets are at all time highs. I'd be wary of lumping it all in at the one time.
I would advise you to do a bit more planning. Looks like you have a time frame in mind, but how much risk do you want to take and what do you want to achieve? Obviously you want to make money but do you want to achieve growth or maintain capital and earn some income etc?
From that point you can decide on a suitable investment.

Diarmuid

How about the VT ETF? Full world market in one etf. You would only need a bond etf after that. With regard to spacing it out, google dollar cost averaging. It's not clear cut to be honest. DCA in over a year might feel more comfortable to a novice investor but I'm not sure that it will produce a better return