Is it true paying a lump sum into an investment ISA risks low profit, but regular small payments spreads risk?

I’ve been told by an confidant during the Hallifax which the reason my investment ISA went down in worth is since I paid my full grant in a single pile sum. By essential the same volume in unchanging tiny amounts, I could have widespread the stockmarket-related risk to the indicate of probably guaranteeing 10-20% profit. This is presumption I accepted the good woman correctly! Does which receptive to advice right? If so, What’s the best volume to compensate in? Would essential in weekly be some-more essential than monthly?

Tagged as: Into, Investment, lump, Paying, payments, profit, regular, Risk, Risks, Small, Spreads, TRUE

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HDT =) June 28, 2010 at 2:04 am: if the market goes down, then yes your risk is reduce because you are averaging in, that is being able to buy more share with the same amount of allotted money.

however if the market keeps going up you’re buying less but still making money on the way up.

this type of investing is usually on a 3 to 5 year time-horizon and you should not invest money you need right now to live off and pay bills etc

there is no optimum, the market are always changing, they are the sum of everyone fear and greed…so the market is irrational and cannot be approached in a rational manner even thought many people think they know what they are doing.

i would suggest you put in a equal amount every month…most institution track the market on a weekly and/or month timeframe

IS IT TRUE PAYING A LUMP SUM INTO AN INVESTMENT ISA RISKS LOW PROFIT, BUT REGULAR SMALL PAYMENTS SPREADS RISK?

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