Here's a great post about the topic:
http://monevator.com/lump-sum-investing-versus-drip-feeding/I think of it this way. I am in no way expert and I welcome any feedback this oversimplified picture.
- The market goes up and down in a wibbly, unpredictable way. It's theoretically possible to make money by trying to time entry and exit with these wibbles, but in practice, it's not reliably achievable.
- Overall the market goes up more than it goes down, that's what makes investing in it a worthwhile pursuit.
- Since it goes up more than it goes down, more often than not, by drip feeding your money into the market you'd be losing out.
- Also, in case you landed on the wrong side of a wibble, it's worth remembering that the longer your time horizon, the less significant the wibbles are to your results, as they get put into perspective by the overall upwards trend.
However it's scary to throw all of your available money into anything riskier than a bank account for the first time, and it's better to do it gradually than not at all. I'd say put in as much as you're comfortable doing, then repeat until you are at your target allocation, and try not to worry about it.
If you can though I really do vote for put it all in and then walk away. The first time I opened an investment account and transferred my savings into it, I checked it two days later just to see the transactions had gone through and so on, and found I was up £100. £100 made in two days just by doing a bit of reading and pressing some buttons! Holy smokes. I'll admit it was a psychological boost, after I'd steeled myself to carefully Not Panic if my hard earned money had appeared to diminish. But then I realised my glee was just as dangerous - wow £100 'profit'! I could take it out and do my big monthly shop for 'free'. Or I could sell up and 'lock in' my gains, and wait for a dip before I put it back in, thus maximising my returns (if I got it right...). Or maybe I should put more of my savings than I'd originally planned into this brilliant novelty that makes free money while I sleep?! I shuddered and closed the window and didn't log in for another six months, which was the right thing to do. I called my then-partner and was like 'omg, I can see why people get addicted to day trading, it's like gambling for rich people'.
Now that I'm used to the whole thing, I am way more chill. You'll get there too, but only by trying and staying sensible while reminding yourself of all the things that you've learned about what to do and not do :)
