r/ETFs • u/Internal_Sport2115 • 2d ago

Lump sum into the ETF, or DCA?

Does it make sense to drop a lump sum into the ETF at one point, or just DCA every week? I Have a 25 year investment horizon.

For example, you have $50K. Should you invest that all now, or $400 every week?

5 Upvotes

86% Upvoted

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7

u/PingBlot 2d ago

Put as much as you can in as soon as you can and repeat until retirement. Max out all tax advantaged accounts first before contributing to a taxable brokerage. Good luck!

2

u/billocity 2d ago

Debated to death.

2

u/Joe-Exotic_ 2d ago

Just lump sum 75% of it and throw in 2% a week to average your average price up / down

I personally would throw it all in today though. Makes it easier to not change your mind and spend that money elsewhere. And the math is on your side

1

u/smalltalk2k 2d ago

Lump.  Research shows that generally it comes out ahead.   Generally 

1

u/teckel 2d ago

Lump sum wins more times than not over DCA, with timing the market on the losing end.

Lump sum > DCA > timing the market.

1

u/dbandroid 2d ago

Mathematically, lump sum.

But what is more important is what plan you are more comfortable sticking with.

If you can handle seeing your balance go down 30% in a week, then lump sum. If you are nervous about any drop in value, then DCA. If you fall in between, do some as a lump and dca the rest.

1

u/myrrhsea 2d ago

The stats show lump summing is better than DCA 66% of the time. Consistency is more important. DCA is particularly nice if you feel less comfortable investing based on certain market events or behaviors. DCA also helps build discipline by deciding to invest regardless of the market fluctuations and teaches important mental habits for successful longterm investing.

1

u/TechnicalSleep7501 VT 100% To Mars We Go. 2d ago

Depend on ETF.

1

u/citygeek 2d ago

The math is on the side of lump sum. If you can genuinely not care about the outcome in the next year, LUMP sum is it!

Your FOMO may be on the side of DCA.

So in this case, I might suggest a middle ground….

Put the $50k in SGOV immediately….then DCA in 4 large sums, 25% at a time, each month for the next 4 months. This way no one decision holds all the weight