Financial Planning Perspectives: Invest now or temporarily hold your cash?

November 21, 2016


For clients holding a large cash balance, it's not always easy to let go. Some might resist investing it all at once for fear of a sharp market downturn soon after they invest. Systematic implementation—commonly referred to as dollar-cost averaging—might provide some protection against regret but at the cost of higher returns.

This research paper explores both strategies and quantifies the costs of investing a large sum immediately versus a systematic implementation over a 12 months.

Use this paper to:

  • Analyze why history and investment theory support investing large sums of cash immediately over systematic implementation.
  • Understand how systematic implementation strategies can help minimize clients’ potential for regret.
  • Examine scenarios where systematic implementation can outperform immediate investment.
Additional materials

Part of Vanguard's Financial Planning Perspectives research series

Financial advice is more nuanced than ever because clients seek individual attention that caters to their unique circumstances. Financial Planning Perspectives is a series of research-based publications that offers sophisticated planning concepts explained in a way that balances theory and practice.


  • All investing is subject to risk, including the possible loss of the money you invest.

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