Shall I invest with a lump sum or dollar cost average?

It's Brian Preston, the money guy, restoring order to your financial chaos, retirement,

investing, taxes. You've got financial questions, he's got financial answers.

It's Brian Preston, the money guy.

Hey, money guy family, Chihose Brian Preston, my co-host, Mr. Bo Hanson.

We're going to go beyond common sense to take your finances to the next level.

So should you invest with a lump sum or dollar cost average? Let me give you some cold,

hard facts, unemotional facts about what's going on here. Here's a thing, Bo.

There is so many blog posts, there's even studies out there.

And people, because here's what we're talking about, you get a lump sum of money.

Maybe you sell a business, life insurance, inheritance.

Yeah, let's just say it's cash of a lump sum. Do you invest it all at once?

Or do you start putting it in over time? Because that's what dollar cost averaging it is.

Is it you're putting it in over whether it's monthly, whether it's quarterly?

You're coming up with a system to try to break up the contributions.

And the facts are, without a doubt, lump sum investing is superior to dollar cost averaging.

About 66 to 67% of the time. And we know this because Vanguard did a study in 2012,

where they went all the way back to 1926 through 2011 and they said, okay, on rolling 10-year periods,

should you over 12 months dollar cost average, and this is a million dollar portfolio,

or should you put it all in right there at the very beginning?

Common sense tells you, okay, the lump sums go do better because we know markets typically

somewhere between 70 to 80% of the time they make money. It's good to be an investor in the long term.

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