My vote would be to dollar cost average over a few years.
Everytime something like this comes up, people get into arguments over crystal balls and predicting futures.
There is a difference between future prediction and expected returns. A simple case: If you toss an unbiased coin, can you predict whether the outcome will be heads or tails? No. However, your inability to predict does not in anyway change the FACT that there is an expected 50% probability of heads and 50% probability of tails.
Same thing with the market. No one can predict the market's future. However, we can calculate the expected returns based on current valuations, and right now they are not pretty. Is it possible that inspite of low expected returns, the markets could return 200% a year for the next 5 years? Sure. It's unlikely, but possible.
If I had 100k to invest today, I would not be lump sum investing.
Few questions you should answer to help this decision:
- If you do invest 100k in lump sum today, and if the market goes down 50% in the next 2-3 years, can you live with that? Or will you kick yourself and get into a turmoil? If it's the former, then you have a good justification to invest in lump sum. If it's the latter, then if you do invest in lump sum, it's likely that you'll make wrong moves (like selling at the worst possible time and losing a lot of money).
- Is it possible that you may need to use that 100k in the next few years or can you afford to lock it up for several years? If there is a market downturn and your portfolio goes down 50% and you want to withdraw it, it's a similar situation as above. You'll be selling at a bad time.
I think your personality will be one of the biggest pieces of this puzzle - the investor is the weakest link in an investment. The best strategy cannot withstand the frailties of the human mind.