GLOSSARY TERM
Lump Sum Investing
Lump sum investing means investing a larger amount of money all at once instead of spreading it out over time.
What does this mean in practice?
This often happens when someone receives a bonus, inheritance or savings balance and decides to invest it in one go. The money enters the market immediately, so it starts working right away. The downside is that the market could fall soon after, which can feel uncomfortable. This is why lump sum investing is often compared with investing gradually over time.
Example
You have €100,000 in cash and invest the full amount today into a broad index fund or ETF. That is lump sum investing. If instead you invested €10,000 per month over 10 months, that would be gradual investing.
Why it matters
Lump sum investing gives your money more time in the market, which can support long-term growth. But it also requires emotional comfort with short-term market moves, especially right after investing.
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