Reduce the worry of market timing with Autoinvest from Zurich

If you are thinking of investing a sum of money in a Zurich Investment Bond, you have two great options. Read on to find out more.

If you are thinking of investing a sum of money in a Zurich Investment Bond, you have two great options:

You can opt to invest it all in one lump-sum, investing the entire sum at once.

You can adopt a phased investment strategy known as ‘Autoinvest’, which involves drip-feeding equal amounts on a monthly basis into your chosen fund, with the aim of removing ‘point in time’ risk.  

Investing your money in one fell swoop may result in higher short-term risk with the potential for greater returns, whereas drip-feeding can reduce overall risk while potentially yielding more conservative returns. The choice between the two hinges on your mindset and risk tolerance. 

Deciding whether to invest a lump sum immediately or drip-feed it into the market is a common dilemma. Personal circumstances are important in this decision-making process, as you must strike a balance between your attitude to risk and desire to investment growth. Given recent volatility in financial markets, investors find themselves in a unique position. The stock market reached a historic peak in December 2023 and has maintained its elevated status since then. However, some experts are forecasting a potential U.S. recession in 2024, heightening the fear associated with investing a large lump sum all at once in these uncertain times. While there are always risks evident in stock markets, it is the psychological impact of these risks that can influence investors’ decisions – and in turn, make you doubt and overthink what the best thing to do is!  

A phased investment strategy available on the Zurich Investment Bond 

To help remove some of this overthinking, Zurich developed Autoinvest as a strategy to help investors better manage their decisions in the face of behavioural biases. We found that the fear of market volatility often discouraged people from committing a lump sum all at once*. Autoinvest is a unique offering from Zurich, available on the Zurich Investment Bond, which aims to replicate the concept of unit cost averaging.  

Choosing Autoinvest can:  

  • Alleviate emotional decision-making in investments
  • Reduce overall risk
  • Navigate the inevitable market fluctuations, thereby mitigating the challenges associated with market timing.  

Autoinvest minimizes the risk of attempting to predict whether the market is overpriced or on the brink of a decline. Instead, it instils disciplined investing consistently in both favourable and unfavourable market conditions. 

By using Autoinvest, investors buy more ‘units’ when prices are lower and fewer when prices are higher -which results in the ‘average price’ being obtained over the drip feed period. This approach reduces concerns related to market timing, adopting a balanced approach to investing. A plan like Autoinvest comes with less dramatic falls in value along the way. Drip-feeding funds into the market during downturns may also yield a more favourable result, taking advantage of lower prices. 


International Equity Fund unit prices 30/04/2022 to 31/10/2022 

While an initial lump sum investment may have its merits, drip feeding investment helps in smoothing out market highs and lows. This strategy can prevent investors from panicking and making impulsive decisions, especially during unfavourable market conditions.   

Lump sum investing Vs phased investing 

Overall, whether you invest a lump sum fully or utilise unit cost averaging via Autoinvest, it is important to remember your overall financial goals and to recognise that neither strategy is trying to time the market – they are both ways to ensure you overcome behavioural biases and spend the right amount of time in the market.   

When is phased investing more favourable? 

If we look back to 2022 there was a sustained period of negative market returns before a recovery.  In this scenario Autoinvest produced better returns, showcasing its effectiveness in navigating challenging market conditions and potentially delivering better outcomes for investors. Lump sum investing carries the risk of unfortunate timing, particularly when the investment horizon is relatively short. Historical instances, such as the collapse of the "dotcom" bubble from 2000 to 2003 and the global financial crisis from 2007 to 2009, saw global stock markets plummeting significantly. While markets eventually recovered in both cases, the recovery took a long time. The Covid pandemic in 2020 also caused a rapid market decline of about a third, but markets recovered much quicker. 

In situations like these, investing a lump sum all at once could lead to a stressful short-term outcome.  

When is lump sum investing more favourable? 

Lump sum investing tends to outperform in a bullish market, while drip-feeding becomes a more favourable option during uncertain times. Looking at the performance of the Zurich International Equity Fund, performance was volatile in 2023. Share prices rose in the first half of the year, followed by a decline from August to October. Then we experienced a rally beginning in November, fuelled by optimism arising from falling inflation and the prospect of interest rate cuts. 

We found that when markets have moved up broadly and are displaying an ‘n’ shaped curve, lump sum investing is more beneficial for the client.   

Speak to your Financial Broker about the best option for you  

The rationale behind lump sum investing is grounded in the notion that, over the long run, markets tend to go up more than they go down*, so it’s better to be exposed to them for the maximum length of time possible. For those with decades, rather than years, to invest, there is a stronger inclination to invest a lump sum. The compounding effect of market returns tends to favour lump sum investing, as a larger portion of the invested capital remains in the market for a longer period. However, when volatility returns to the market it’s a challenge for those who want to invest and many find themselves overcome by fear and unable to take action. This is where Autoinvest from Zurich can help. Autoinvest helps navigate the volatility associated with market events and potentially leads to a better overall outcome for the investor. 

Depending on your unique set of circumstances, either option could be more appropriate. That’s one of many reasons why it’s always worthwhile speaking with your Financial Broker before making such investment decisions.  

For more information:  

Speak to your Financial Broker. Call our Financial Planning Team on 0818 202 102download Autoinvest flyer or visit 

*Source: Zurich Life, February 2024 

This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. 

Warning: If you invest in these products you may lose some or all of the money you invest.

Warning: Past performance is not a reliable guide to future performance.

Warning: The value of your investment may go down as well as up.

Warning: Benefits may be affected by changes in currency exchange rates.

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