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Working Adults: Should I Invest A Small Sum Regularly Or A Big Sum At One Go

Turns caffeine into digestible finance content. You can contribute your thoughts like Ming Feng here.

“The best time to plant a tree was 20 years ago. The second best time is now”.

Be it S$100 or a million, it is always good to start early.

TL;DR- 3 key takeaways

  • STI ETF: From past year data, lump-sum investors benefit if they invested before February 2017. Other than that, a regular monthly investor wins.
  • For beginners: the dollar-cost averaging method such as a Regular Savings Plan can help beat advanced investors.
  • For advanced individuals: knowledge can definitely help cut the cost of his investment and gives him an advantage in his investment positions.

What is dollar-cost averaging?

Dollar-cost averaging is an investment technique of investing a fixed amount of money into a particular investment on a regular schedule. When one invests using a Regular Savings Plan, he is adopting such strategy in his investment.

Pros of dollar-cost averaging

  • Requires less time monitoring
  • Requires less starting capital to invest (regular savings plan for only S$100 per month)
  • Forces you to save regularly
  • Buy more shares when the price is low and lesser shares when the price is high.

Cons of dollar-cost averaging

  • Dollar cost averaging requires more transactions, resulting in more fees
  • Lump sum investing has a chance of higher returns

What is lump-sum investing

Lump-sum investing is an investment method of investing a single complete sum of money at one go.

Pros of lump-sum investing

  • Chance of outperforming dollar-cost averaging (if you know what you are doing)
  • Possibly lower fees when compared to dollar-cost averaging due to lesser transactions

Cons of lump-sum investing

  • Requires a lot more effort monitoring the market
  • Requires more starting capital to invest

Case study: Dollar-cost averaging vs lump-sum investing

We ran a quick analysis, using historical data of Straits Times Index (STI) Exchange Traded Fund (ETF) for comparison

Dollar-cost averaging on the STI ETF over a span of 1 year


  • You wish to invest S$100 every month
  • Your investment in done through a Regular Savings Plan using POSB Invest-Saver (cheapest for investment under S$500)
  • Invested on every 15th of each month (POSB Invest-Saver)

Here are the historical share prices of STI ETF on ever 15th of the month, from 15 September 2016 to 15 August 2017:

STI ETF monthly prices

With the above information, we derived that

Dollar-cost averaging of STI ETF

MonthCost per unitUnits Purchased Fees
Total Monthly Value
Sep 20162.90340.9999.59
Oct 20162.91340.9999.93
Nov 20162.90340.9999.59
Dec 20163.03320.9797.93
Jan 20173.08320.9999.54
Feb 20173.14310.9898.32
Mar 20173.18310.9999.57
Apr 20173.25300.9898.48
May 20173.35290.9898.13
Jun 20173.34290.9797.83
Jul 20173.34290.9797.83
Aug 20173.42280.9696.72

An investor using the dollar-cost averaging method through his Regular Savings Plan will end up with a total number of 373 units of STI ETF, with a total cost of investment of S$1,183.46. (including fees).

Hence, the average cost is at S$3.17 per unit.

Lump-sum investing in the STI ETF

Assuming an investor:

  • Invested into 373 units of the STI ETF at S$3.17 per unit.
  • Invested using the cheapest brokerage account, DBS Vickers Cash Upfront (Fees: S$10 + 0.12%)
Cost per unitUnits Purchased Fees
Total Cost

Comparing Dollar-cost averaging and Lump-sum investing

 Dollar-cost averagingLump-sum investing
Cost per unit (S$)3.173.17
Units purchased373373
Total Fees (S$)11.7611.42
Total cost of investing (S$)1,183.461,193.83

After comparing, we can see that despite buying the same unit at the same price at a lump sum, the total cost of lump-sum is more despite lower fees. No doubt, the difference in fees will increase over time, and that of a lump-sum investment will be cheaper as time goes by.

Further Reading

Using the same example, a lump-sum investor will have a price advantage if he invests his lump-sum of money before 17 February 2017.

Assuming he managed to invest 373 units of STI ETF at a price of S$3.14 per unit, his total cost of investment will be S$1182.63. This case, his total cost of investing is cheaper than the above example and his price per unit invested is better.



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