The most common question asked by the real estate investors who own a large sum of money is that should they Invest All at once or gradually? Real estate market has been on the rise for several years now but it doesn’t mean that the good period is going to last forever. The rise and fall of the real estate market plays an integral role in choosing the investment opportunity which would turn out to be profitable.
Well, the truth is both options have their own benefits. So, Invest All at once or gradually, you will quickly gain disclosure to the markets. According to statistics, the returns of shares exceeds the returns of stocks and bonds. If the market is going up, putting all at once will be the fruitful choice it will also maximize the returns. On the other hand, if you invest in installments, it will reduce the risk of losing the big amount in case the market goes down. Market’s volatility will give you an advantage and if the share prices go up, you will be able to make more than you initially invested.
What does Research say?
Research statistics demonstrate that investing the entire sum of money produces better returns than gradual investing. The stock and bond markets tend to go up more often than they go down and they typically generate higher returns than cash equivalents. It is true that step-by-step investing saves you from risks of market setbacks and reduces the fear of losing a large investment but it is not a very professional way to do so. Gradually investing is only good for the people who have their cash flow coming in on a weekly or monthly basis.
In a study conducted by an investment company named The Vanguard Group, they compared gradual investment with lump sum investing in the United States and concluded that the all-at-once approach achieved better returns two-thirds of the time compared with investing in equal installments over the first 12 months which clearly means that if you see the markets going up, you should definitely put your money to work right away.
On the other hand, they also stated that step-by-step investment has its own short term advantages. The investors who want to avoid potential feelings of regret have a keen eye for worst-case scenarios which ultimately forces them to avoid investing a blink of an eye. In any case, the investments should be steady and consistent as the market might open an unexpected investment opportunity which might turn out to be profitable even if the economy suffers a fall as well.
Vairt is a crowdfunding real estate investment platform for tokenizing and liquidating real estate assets through blockchain. We provide our users with transparent and profitable investment opportunities and let them know the calculated amount of risks in every deal to ensure that they get the most out of their investment.