The amounts invested regularly can be minimal. This allows the investor the opportunity to accumulate wealth and take advantage of the potential growth in the investment. Some others like real estate, individual stocks, currencies, derivatives may not be suitable as bigger lump sums may be necessary. The volatility of the investments must be considered when contemplating either method. Regular investing provides the opportunity to average out the ups and downs whereas timing takes on a more crucial dimension in the case of lump sum.
Diversification is important in both methods, but comparatively, more so in the lump sum method.
Unit trusts or investment linked plans are less volatile than individual stock investment. This variable is considered in the choice of methods. Investor Behavior A factor in investments, that seems to be paid less attention, is the attitude and emotion the investor brings into the investments. Different people have different expectations and react differently as time goes by. Risk tolerance, often mentioned by investment advisors, is just one part of the investor's attitude.