Is Investing A Lot Of Money At Once the Best Idea? Or Should I Spread It Out?

It’s the week your big bonus from work hits your bank account. Or you receive a sizeable cash gift or inheritance from a relative. Perhaps you have proceeds from the sale of your home or cash from a rollover retirement account. Or you’ve saved money for a few years because of rumors about the stock market.

Whatever the reason, you now have a large sum of cash. And you want it to start making more money. To capitalize on the power of compound interest, you’re ready to invest it.

But after doing some research and talking it over with financially savvy family and friends, you still aren’t sure whether you should invest it all at once or spread it out over time.

There’s a reason for the mixed messages you’re getting. There isn’t one right answer.

While research from Vanguard — one of the world’s largest investment management companies — indicates lump sum investing is the method more likely to grow your wealth over time, your emotions matter too.

Once you account for your possible reactions to significant market changes, it gets more complicated than following past trends and statistics.

Whether to invest your money in a lump sum or use a dollar-cost averaging strategy to spread investments…