The stock market crashes 30%. You've got £10,000 ready to invest. Which strategy gives you the best chance of making the most money if the market eventually recovers?
-
Invest all £10,000 immediately
127 votes (21.0%)
-
Invest £2,000 every month for five months
224 votes (37.0%)
-
Wait until prices stop falling
125 votes (20.7%)
-
Wait until the market starts rising again
129 votes (21.3%)
Total votes: 605
Answer: A — with an important qualification.
Historically, investing a lump sum immediately has beaten spreading investments over time more often than not, because markets tend to rise over the long term.
But that doesn’t guarantee the best outcome after a particular crash. If prices continue falling, spreading purchases could work better.