As a result, financial planners need to advise clients who receive these payments and make large cash investments to do so as soon as possible. The study concluded that dollar-cost averaging would be unlikely to topple the superior results of lump-sum investing at this time (Williams and Bacon).
Profit-sharing allows employees to earn bonuses according to company performance (GoSmallBiz 2008). A certain percentage is set aside by the firm and paid to the employees if certain annual profit goals are met or exceeded. Bonuses are paid in cash or as a contribution to the retirement fund, or else partly in cash and partly as contribution to the retirement fund. The advantage for employees is that they share in the company's profits. The disadvantage is that they receive the share even if their performance does not improve or they do not receive it even if their performance improves (GoSmallBiz 2008).
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