ETF Exchange Traded Funds (ETFs) 2021

Another strategy that has been mentioned before on the forums is to divide your capital into say 12 buckets. Invest one bucket at the beginning of each month. if the market goes down 10% , the next month you will invest 2 buckets. If it goes down another 10%, invest 3 buckets, until fully invested.
Key with this is to write out your plan, and commit to it.
Problem with investing piece meal like this is you are never going to be happy - market goes up, should have invested more, market goes down, should have invested less. Get your mind round those scenarios before they happen.

 

As others have mentioned, it really just comes down to personal choice and what you are comfortable with. Statistically, lump sum is likely to give a better result than DCA. Having said that, if you are the sort of person who is going to panic sell and go to cash if the market crashes then all the statistics in the world are not going to help you and your lump sum strategy is likely to give you a much worse result than DCA if the proverbial hits the fan.

I've been in that situation twice with significant amounts and lump summed both times. First time I got "lucky" and second time I got "unlucky". I honestly felt pretty much the same both times because I knew myself, knew why I had done what I had done, had my plan, and just kept on going.

Figure yourself out and then you'll know what option to take.

 

Then there is this.

"How do retail investors respond to the outbreak of COVID-19? We use transaction-level trading data to show that investors significantly increase their trading activities as the COVID-19 pandemic unfolds, both at the extensive and at the intensive margin. Investors, on average, increase their brokerage deposits and open more new accounts. The average weekly trading intensity increases by 13.9% as the number of COVID-19 cases doubles. The increase in trading is especially pronounced for male and older investors, and affects stock and index trading. Following the 9.99%-drop of the Dow Jones on March 12, investors significantly reduce the usage of leverage."

COVID-19 and investor behavior

It's an option.

 

Thanks for posting this, I was just about to split 200K between VGS & VAS but now I'm considering investing the lot in VDHG, I need to do a bit more research but any opinions would be welcome.

 

Hi Ian, lots of helpful replies already but thought I'd throw this into the reading mix for you in case you haven't come across it yet.

Lump sum investing — Passive Investing Australia

All the best with your decision!

 

Not sure if I missed it, but I think it would depend on your expected timeline. If you are young I think it would be better to go 50% VAS/VGS. Why would you want to allocate 10% of your funds to bonds in this interest rate environment? You will also be saving yourself 20bps in fees.

Just my 2c....

 

And maybe not so helpful.

Is DCA Better Than Lump Sum Investing? - Connect

All point to:

 

Wow thanks guys you are a helpful bunch.

 

Thanks for the reply Gav, I'm 34 and work one day a week so I was intending to live off this and a rental property income so it's a long term play 10-20 years. Good point regarding bonds/rates

 

If this is by choice, then I say Well Played sir/ma'am!

 

Hahaha thanks mate, yes it has been a goal for some time, I bought a cheap townhouse and have to cook my own meals and drive a standard ute but at least I have my freedom

 

Get yourself a dog in the back of that ute and yours is truly the life lived best.

... think I should go buy a ute now.

 

All over it! Everyone needs a ute, with a canopy for camping

 

Now that is a very good boy/girl and the best investment of all. I feel a bromance developing here.

And before everyone yells "Off topic", I submit the LIC & Chicken thread.

 

I prefer to buy big on Blackhawk kibble (Everyday Type of Food) when Petbarn have a sale, rather than sign up for the monthly delivery. Then I sit back and maybe pick up an extra bag or two when there's another bargain.

The Prime100 is a more regular investment (Dogroll Cost Averaging) - but you can also go big when you get the chance and freeze it.

So there is my investment mindset in a nutshell.

 

Since you mentioned debt recycling, just be careful where your borrowed cash is moving around. And this includes any left over funds after purchase in your broker platform.

I know how you feel. Have you bought shares or etfs before? It gets easier over time.
I DRed last month, and increased my shares holding by 52% as a lump sum

When you get your dividends cheque, you'll wish you had lump invested

 

Yes thank you I have a wha to think is a reasonable understanding of the best process but I am going to map it all out properly before I make any purchases.

I bought shares a few years ago when we were saving for our first house but only held for about a year before selling to fund our deposit. So not the best example but I was just trying to do something that was better than having them sitting in the bank.

I feel good about it this time, I have a much better idea of the long term plan. But I know at least for the first few months I will be checking my balance every hour!

 

How is this 'off topic' in the ETF thread?
Dog----- ExtremelyTrustworthyFriend

 

Inflation is scary.

 

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