Receiving a large cash inheritance, perhaps from the sale of a deceased parent’s home, is not unusual. A common question from many people wanting to invest in listed securities is whether it’s better to invest lump sums in one chunk, or to drip-feed the windfall into the market progressively over time.

To answer this question, it’s helpful to consider the trade-off between investing capital immediately versus dollar-cost averaging. Similar to a regular savings plan, dollar cost averaging simply involves investing the same amount of money at set intervals over a period – whether market prices are up or down.