How to invest a lump sum

first_img “This Stock Could Be Like Buying Amazon in 1997” T Sligo has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. 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In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. Imagine it: you’ve come into a fairly substantial sum of money. You’ve cleared your debts, and figure you’d now like to invest the money in stocks.What’s the best way to invest the money going forward? All at once, or by putting a percentage amount of the lump sum into your chosen stocks each month?5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…In this example, our imaginary investor has an investment vehicle, like a Stocks and Shares ISA, and a portfolio of stocks they want to own. We are going to examine if it is better to put all of the money in at once, or to feed it in over time.Pound cost averagingThis phrase might be familiar. Pound cost averaging is the process of buying a stock at regular intervals, say monthly. For example, an investor with a lump sum of £100,000 may choose to invest £8,333 a month over a year.The benefit of this approach is that as the stock price fluctuates up and down, the investor is likely to buy at both the high and low points, meaning that the average price paid will even out over time. The idea is that the investor will not lose out if the market suddenly drops after investing the lump sum.Pound cost averaging sounds good then. But there are a few drawbacks.By holding back the money and staggering the investments, your asset allocation will have changed. For example, a £100,000 portfolio may go from having 80% of your investment in stocks and 20% in bonds, to 40% stocks, 10% bonds, and 50% cash, while you hold back money to invest over the coming months.As we know, over the longer-term stocks tend to return more money to investors than cash. Therefore, the possibility of half your portfolio not significantly increasing in value is probably not an ideal situation.This brings me to the other negative with pound cost averaging – that markets tend to go up more than they go down.Let’s examine the alternative.Invest it all at onceTo the prudent investor, investing a lump sum at once will sound scary. In a bear market, there will be concerns that stock prices will only fall further. In a strong bull market, people will be predicting the end-times. Either outcome would be less than ideal.There are some, like JL Collins, the author of The Simple Path to Wealth, who think it is best to invest a lump sum at once. He argues that by pound cost averaging (or dollar cost averaging, to him) you are betting that the market will go down. History, however, has shown that over longer periods, the stock market tends to go up.Your investment will possibly earn dividends too, which could be worth more than the interest that most cash savings accounts are offering at the moment.Each investor’s situation is different, and risk tolerance is down to personal preference. But when it comes to investing a lump sum, I think I’d take the view that it is probably better to invest it all at once. Image source: Getty Images last_img read more

Fighting for $15 minimum wage in the South

first_imgAtlanta, March 21.Atlanta — With fists pumping in the air, some 500 low-wage workers from across the South filled the sanctuary of the historic Ebenezer Baptist Church here with a resounding chant on March 21 to open a one-day mobilizing conference. “I believe that we will win” was the defining slogan as fast food, Walmart, home health care, child care, college adjuncts, retail and auto parts workers gathered from as far away as Missouri and Texas, Virginia and North Carolina to build for the April 15 “Fight for $15” day of action.Many participants wore the brightly colored T-shirts of their area’s campaign to win economic justice and a liveable wage.Underlining the confidence that they will win, program speakers listed the achievements of their young movement — such as legislation in states and cities across the country raising the minimum wage as high as $15 an hour in Seattle and Los Angeles, and decisions wrestled from Walmart and others to raise beginning pay by a dollar an hour.Most speakers were young people of color whose stories of hard work and poverty conditions resonated with an audience that cheered them on when they confessed to being nervous about speaking before such a large crowd.Dozens came from the Ferguson and St. Louis area. Burger King worker Carlos Robinson connected the police terror to the poverty wages that propelled resistance among youth to the murder of Michael Brown last Aug. 9.Three of the Memphis sanitation workers, whose 1968 historic strike won the support of the Rev. Dr. Martin Luther KIng Jr., were featured in a special panel that connected the fight against racism with the struggle for union rights, decent pay and safe working conditions.Expressing their enthusiasm for the upcoming national day of action in April, when many tens of thousands of low-wage workers and their allies will march and rally in hundreds of cities, the conference spilled out of the church and took to the streets of Atlanta.The activists took over Atlanta’s famous Auburn Avenue on the way to the McDonald’s next to Grady Hospital.The chanting crowd surged into the restaurant, demanding the fast food giant raise the workers’ pay to $15 an hour. A 23-year-old McDonald’s worker, Robertson Anderson, jumped over the counter and marched out of the building to the cheers and applause of the jubilant group. Anderson, who said he had not known about the campaign before, stated: “I do know one thing. Everyone deserves $15 an hour.”That’s the message sure to grow stronger across the South and the whole country on April 15 and beyond.FacebookTwitterWhatsAppEmailPrintMoreShare thisFacebookTwitterWhatsAppEmailPrintMoreShare thislast_img read more