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windfall

Lump sum

If you have a lot of savings, won the lottery, sold your bitcoins (at profit), or received an inheritance, it feels very risky to invest your money at once. After all, someone predicts an upcoming stock market crash every day.

However, that risk is already included in the price, and if you do not believe in market timing, you should invest the money at once. Only (important) sidenote here is that there is NO RUSH! Feel free to hold off investing for a year to decide what you are most comfortable with, such delay won't (statistically) hurt your long term return.

Remember that on average the stock market is usually at its highest point ever (after all, the stock market rises on average). If you do not dare to make a direct investment, spread it over a maximum of 6 months. Vanguard has published a good study of such a lump sum investment.

Finally, whatever happens, stick to your strategy. There will always be large fluctuations, the emotional long-term risk of loss is greatest.

windfall.txt · Last modified: 2020/05/27 12:51 by dreas