Lump sum investing is an investment strategy that involves investing a large sum of money all at once, typically in a single asset or a diversified portfolio. Unlike dollar-cost averaging, where investments are made gradually over time, lump sum investing commits the entire investment amount upfront.
Lump sum investing can be an effective strategy for investors who have a large sum of money available to invest and who have a high tolerance for risk. Historically, lump sum investing has outperformed dollar-cost averaging in bull markets, but it is important to note that past performance is not a guarantee of future results. There is always the potential for loss when investing, and investors should carefully consider their risk tolerance and investment goals before making any investment decisions.