You have €50,000. Should you invest it all today, or spread it over 12 months? The question comes up constantly, and the honest answer is not the one people expect.
What the figures say
Statistically, investing straight away (lump sum) beats spreading it out about two times out of three. The reason is mechanical: markets rise more often than they fall, so staying in cash has an opportunity cost. On average, lump sum wins.
Why DCA is often still the right choice
Because investing is not only a mathematical problem, it is a human one. Investing €50,000 the day before a 30% crash can put you off markets for a decade. DCA (scheduled investing) buys peace of mind, and peace of mind is what keeps you invested — which is worth more than a few points of expected return.
The real question
It is not “which method is optimal?” but “which method will let me stick to my plan without cracking?”. A strategy you abandon at the first crash has a real return of zero.
The obvious case
For monthly saving out of your income, the question does not even arise: you are doing DCA by construction, and that is perfect.
À retenir
- ✓Mathematically, investing in one go wins about two times out of three.
- ✓DCA buys serenity, and serenity keeps you invested.
- ✓The best strategy is the one you will hold on to during a crash.