Is it best to put £20k in S&S ISA in a lump sum or to space it out monthly?

18 March 2021

Question by Mark

Is it best to put £20k in S&S ISA in a lump sum or to space it out monthly?


Answered by Carla Brown

Hi Mark, Thanks for your question.

When stock markets are moving up and down it is natural for investors to be concerned that they will ‘get their timing wrong’, investing a lump sum one day only to see share prices fall significantly the next. It is so difficult to successfully time the markets. You might be lucky when you invest a lump sum, but nobody knows what the stock market will do next week, next month or next year. The sharpest falls and the largest gains are often concentrated into short periods of time, so if you try to time the market to avoid the falls, you’re highly likely to miss the gains.

Taking a long-term view is what matters most. One way to reduce the worry of investing at the wrong time is to invest on a regular basis. By drip-feeding your money into the market you have the potential to buy more units when share prices are falling.

By saving regularly or phasing a lump sum investment from cash into the market over a number of months it is possible to benefit from the short-term ups and downs and, at the very least, reduce the worry about investing at the wrong time.

Answered by

Carla Brown

Founder and Managing Director

Carla is the founder and Managing Director of Oakmere Wealth Management Ltd which is a growing practice on the outskirts of Chester.