Putting a large sum into the stock market all at once has beaten spreading it out over a few months about two-thirds of the time, according to a February 2023 study by Vanguard. In global stocks from 1976 to 2022, the lump sum came out ahead 68% of the time.

That finding matters for investors in Hong Kong, Singapore and Jakarta who receive a bonus, sell a property or move savings out of deposits and wonder whether to buy in stages. The Hang Seng Index's last five years, with three straight annual losses from 2021 to 2023 followed by two strong rebounds, show both sides of the trade more sharply than most markets.

What Vanguard's research found

Dollar-cost averaging means splitting a sum into equal parts and investing them at set intervals, such as monthly. Lump-sum investing means putting it all in on day one.

Vanguard's paper, written by Megan Finlay and Josef Zorn, compared a lump sum with a three-month averaging plan across several markets. The lump sum won 66.4% of the time in U.S. stocks, 68.1% in the U.K., 67.5% in Australia and 61.6% in emerging markets. The reason is simple: stocks rise more often than they fall, so money held back in cash usually misses gains.

The edge was modest. For a 60/40 stock and bond portfolio starting at $100,000, the average ending value was $109,360 for the lump sum against $107,453 for averaging, a gap of 1.8%, the authors found. Stretching the plan to six months widened the shortfall. Even after counting interest earned on the cash waiting to be invested, the lump sum still won 65% of the time in an all-equity portfolio.

Vanguard also tested the choice many hesitant savers really face. Averaging into the market beat simply staying in cash 69% of the time. In other words, a gradual plan is a reasonable second best; leaving the money idle is usually the worst outcome.

What the Hang Seng Index shows

Hong Kong is a useful test because its recent path was unusually bumpy. Capital Times ran the numbers using month-end Hang Seng Index closing levels from Yahoo Finance, for a HK$120,000 investment either made at once or split into 12 monthly installments of HK$10,000. The figures use index prices only and leave out dividends and fees.

In a falling market, averaging wins. An investor who put HK$120,000 into the index at the end of 2021, when it stood near 23,398, held about HK$101,500 a year later as the index slid to about 19,781. The same money fed in monthly over 2022 was worth about HK$117,500, because the later installments bought units near the October 2022 lows.

In a rising market, the lump sum wins. Starting at the end of 2023, with the index near 17,047, the lump sum was worth about HK$141,200 at the end of 2024 after the index gained 17.7%. The monthly plan reached about HK$135,100, because much of the money went in after prices had already climbed.

The rebound continued. The Hang Seng ended 2025 at 25,630, up almost 28% for the year, according to Trading Economics, and Dow Jones Newswires reported it was the index's best annual gain since 2017. Hong Kong-focused savers following the MPF's recent swings have seen how quickly that momentum can stall in a given month.

Over the full stretch, timing mattered more than method. A lump sum invested at the end of 2020, shortly before the index peaked in early 2021, was worth about HK$108,500 by the end of September 2026; averaging over the first 12 months produced about HK$109,600. Investors who began at the end of 2023 were far better off whichever approach they used: about HK$173,300 for the lump sum and HK$165,800 for averaging.

How to apply it

The research points to a few practical rules. If the money is already set aside for long-term investing and the investor can sit through a drop of 20% or more, investing it at once has better odds. Vanguard's own data show that edge is a probability, not a guarantee: roughly one time in three, averaging would have done better.

Averaging makes most sense for investors who would otherwise not invest at all, or who would sell in a panic after a sharp fall right after a lump-sum purchase. Keeping the plan short limits the cost, and three to six months is the range Vanguard tested. For investors buying overseas funds, fund domicile and withholding tax can affect returns as much as the choice of entry method.

A separate case is regular saving from salary. Monthly contributions to a pension scheme or an ETF savings plan are averaging by default, because the money arrives monthly. The lump-sum question only arises when a large sum is already in hand.

Costs also count. In markets where brokers charge a minimum commission per trade, 12 small purchases can cost several times more than a single one, which eats into the benefit of spreading out.

The Hang Seng closed September 2026 at about 24,613 and October at about 23,294, both below its end-2025 level, according to Yahoo Finance data, a reminder that the next 12 months could favor either approach.

This article is general information, not financial advice.