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Lump Sum Investing vs Regular Investing

by Irish Life Financial Services

Written by Irish Life staff

Guides • 27 March 2025 • 6 min read

In this guide, you will learn

Lump sum investing: what is it and how does it work?

Advantages of lump sum investing

Investing early is key.

“Generally, market growth looks favourably on early investment. The moment your money is invested it has the opportunity to benefit from compound growth.”

Disadvantages of lump sum investing

When it makes sense to invest a lump sum:

You have a financial windfall: if you’ve received an inheritance, sold a property, or received a redundancy payment you don’t need for living costs, it makes more sense to invest it all at once than to use Euro-cost averaging.

You’re making a long investment: we encourage investors to invest for a minimum of five years, but if you’re looking to the super-long-term (e.g. saving for retirement in 25 years) then market volatility matters less and overall return is the thing that matters most.

You've low-interest savings: if you have savings over and above an emergency fund that are doing nothing but sitting in the bank, you’re likely better off investing them instead of leaving them vulnerable to inflation.

Is lump sum investing better than regular investing?

Which investment is right for you?

So is regular investing always worse?

Regular investing can be the best option for many people.

The psychology of lump-sum investing

Investment strategy: why not both?

“Remember that when your money isn’t invested, it’s also at risk: inflation can erode the value of your savings just as compound growth can increase it.”

Choosing between lump sum investing vs regular investment

Lump sum investment works best for:

Long-term investors: if your investment goal is decades away (e.g. saving for retirement) then short-term market volatility matters less and benefitting from immediate potential growth makes the most sense.

Those with large cash sums: if you’ve received a windfall, or have savings over and above an emergency fund, it’s likely to lose value over time. When invested, it can outperform inflation.

Investors with cool heads: if the potential psychological impacts of investing your entire lump sum don’t faze you, then crack on!

Euro-cost averaging (regular investing) is better for:

People with monthly income: it’s natural for salaried employees investing from each payday to follow this model naturally, and makes much more sense than saving up to invest.

Those who are risk-averse: Euro-cost averaging smooths volatility and gives you less exposure to market downturns, but just remember that it works both ways!

Remember: time in the market is everything

Warning: If you invest in this product you may lose some or all of the money you invest.

Warning: The value of your investment may go down as well as up.