While investors of all stripes have had their confidence in the markets badly shaken, those sitting on a rollover from an individual retirement account, an inheritance or other windfall are in a particularly tough spot.
Should they invest the money all at once (so-called lump-sum investing) or dribble it into the markets in equal increments over a period of months or years (dollar-cost averaging)?
The answer depends, in part, on whether they are more concerned with maximizing their long-term returns or minimizing their short-term risk of losses—and the psychological pain that can come from diving in just before a market tumble.
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