【summary】
Whether lump sum investment or reserve investment is the correct answer for the new NISA differs from person to person.
In theory, if the market is going to rise over a long period of time, it is likely to be more advantageous to make a lump sum investment early.
But in reality, the price may drop right after you buy it.
What is important for beginners is not only the expected return, but also whether they can continue trading during a downturn.
| How to | Suitable for |
|---|---|
| Lump-sum investment | People who can withstand price declines and people with large surplus funds |
| Reserve investment | Beginners, people who want to reduce their psychological burden, and people who want to fit into their household budget |
| Split investment | People who want to go somewhere between lump sum and savings |
If you are unsure, it is easier to invest in savings or split investments at first.
What is lump sum investment?
Lump-sum investment is a method of investing a large amount of money at once.
For example, if you have 3 million yen on hand, you can use the new NISA to put the entire amount into an investment trust or ETF.
手元資金300万円
↓
一度に投資
↓
長期で保有The advantage of lump sum investing is that you can put your money into the market quickly.
If the market continues to rise for a long time, it may be more advantageous than waiting with cash.
However, if the market price drops immediately after buying, the psychological damage will be great.
What is reserve investment?
Accumulative investing is a method of investing a fixed amount at fixed timings, such as every month.
For example, set it as 30,000 yen every month and 50,000 yen every month.
毎月5万円
↓
高い月も安い月も買う
↓
長期で保有The good thing about cumulative investment is that you can diversify the timing of your purchases.
It is easy to buy less when the market is high and more when the market is low.
The expected return is not necessarily higher than a lump sum investment.
However, it is an easy method for beginners to follow.
Comparison table
When comparing lump-sum investment and cumulative investment, the difference is quite clear.
| Item | Lump-sum investment | Reserve investment |
|---|---|---|
| Investment timing | All at once | Split periods |
| Rising market | Easily advantageous | More likely to be delayed than a lump sum |
| Immediately after a decline | Unrealized losses tend to appear large | It is easy to lower the average purchase price |
| Psychological burden | Large | Relatively small |
| For beginners | Choose someone | Easy to approach |
| Household budget management | Need a large amount of extra funds | Easy to match with monthly surplus |
As you can see from this comparison, there are situations where lump-sum investment is advantageous if you just look at the numbers.
However, from a psychological perspective and household budget management, many people find it easier to invest in savings.
People who are suitable for lump sum investment
Lump-sum investment is suitable for the following people:
- Secure sufficient funds for daily life defense
- I have extra funds that I won't use for 10 years or more.
- You can avoid selling even if the price declines by around 30%.
- Have investment experience
- You can invest after deciding on asset allocation
The important thing when investing in a lump sum is not to change your policy even if the price goes down after you buy it.
For example, if you invest a lump sum of 3 million yen and the stock immediately drops by 20%, the appraised value will be 2.4 million yen.
If you sell in a hurry at this time, a lump sum investment is not suitable for you.
Lump-sum investment requires more mental ability than financial strength.
People who are suitable for reserve investment
Reserved investments are suitable for the following people:
- Beginners in investing
- Not accustomed to price movements
- I want to invest little by little from my monthly income.
- Afraid of grabbing high prices
- I want to increase or decrease according to my household budget.
Reserve investment is not a method of guessing the market price.
This is a method that makes it easier to continue trading without having to guess the market price.
It's best not to make a mistake here.
Even with savings investments, you can lose money.
However, by dividing the time of purchase, you can reduce the anxiety of betting everything on the first purchase.
Intermediate plan of split investment
If you are unsure whether to invest in a lump sum or in savings, you can also invest in installments.
For example, if you have 3 million yen on hand.
100万円を先に投資
残り200万円を12か月から24か月に分けて投資This allows you to diversify the timing of your purchases while maintaining the speed with which you place your funds in the market.
Split investing is suitable for the following people:
- Lump-sum investment is scary
- But I don't want to wait long with cash.
- I have some investment experience
- I want to have some margin for additional investment in the event of a market crash.
With the new NISA, it is not necessary to provide perfect answers from the beginning.
You just have to adjust it so that you can continue.
Common mistakes
The following patterns are likely to fail when it comes to lump-sum investment and savings investment.
| Failure | What's the problem |
|---|---|
| Selling after a lump sum investment | Long-term investment premise collapses |
| Increase the amount of savings too much | Household finances become difficult and it is not possible to continue |
| Look at market prices and change settings every month | Savings become less meaningful |
| Being swayed by the timing theory of SNS | Losing your own rules |
| Putting in money that is not available | High risk of selling midway |
Especially for beginners, I would like to be careful not to change the investment method too much midway through the investment process.
Whether you invest in a lump sum or in savings, if you don't have rules set at the beginning, you will be swayed by the ups and downs of the market.
summary
Whether lump sum investment or reserve investment is the correct answer for the new NISA differs from person to person.
For those who have extra funds and can withstand the decline, lump-sum investment is also an option.
For beginners and those who want to continue investing according to their household budget, savings investments are easier to handle.
If you are unsure, it is realistic to start with cumulative investment or split investment.
What matters is not just which one is theoretically more advantageous.
It's about choosing a method that you can keep going even when you're down.
Reference
- Financial Services Agency "Know NISA"
- Financial Services Agency “Basics of Asset Formation”
- Financial Services Agency "Tsumitate Simulator"
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