Premium: Investing a lump sum or “dollar cost average” in our new $10,000 portfolio

Decades ago, a family friend from the Eastern Cape was transferred to his employer's US headquarters. He enjoyed a successful career and although now happily retired in Florida, keeps in touch with events "back home" and visits regularly. There really is no such thing as an ex-South African.

Our friend, naturally, is also a member of our tribe. Last night dropped me an email about our new $10,000 portfolio – asking whether he should invest a lump sum or "dollar cost average" by staggering share purchases over our usually recommended three months. It's a question also being asked by other BizNews community members.

In principle, it is always best to reduce the timing risk when considering lump sum investments. Especially for SAs taking money offshore, because we have to contend not only with share price movements, but also the volatility of Rands being converted into hard currency.

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