Author Topic: 15k lump sum to invest  (Read 1960 times)

AD700

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15k lump sum to invest
« on: June 04, 2018, 12:18:39 PM »
So, I have a 15k lump sum to invest, and I'm guessing you will all tell me to put it straight into a low cost index fund, right?

Given that there are threads on this forum dating back to 2014/15 talking about how over-valued the equities market is, I can't help but feel a little unnerved. 

I suppose I should just bite the bullet and put it all in right away. Any alternative approaches or suggestions? I guess I'm just looking for reassurance.

This will be about 10 per cent of my NW.

« Last Edit: June 07, 2018, 08:56:52 PM by AD700 »

MDM

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Re: 12k lump sum to invest
« Reply #1 on: June 04, 2018, 12:45:06 PM »
Can you do better than Bob?

FIRE@50

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Re: 12k lump sum to invest
« Reply #2 on: June 04, 2018, 12:51:12 PM »
Can you do better than Bob?

Bob worked until he was 65??? He must have done something wrong.

MDM

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Re: 12k lump sum to invest
« Reply #3 on: June 04, 2018, 12:52:35 PM »
Can you do better than Bob?
Bob worked until he was 65??? He must have done something wrong.
Why, yes - so that's why you should be able to do better. :)

terran

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Re: 12k lump sum to invest
« Reply #4 on: June 04, 2018, 01:23:14 PM »
Given that there are threads on this forum dating back to 2014/15 talking about how over-valued the equities market is, I can't help but feel a little unnerved. 

Doesn't this fact tell you that you can't time the market? Just think of all the returns those people too scared to invest since 2014/15 have missed out on.

Brother Esau

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Re: 12k lump sum to invest
« Reply #5 on: June 04, 2018, 01:31:57 PM »
It's not about timing the market, it's about time in the market.

frugledoc

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Re: 12k lump sum to invest
« Reply #6 on: June 04, 2018, 03:06:03 PM »
Just jump in.  It can seem a bit scary. Scream if you have to.

In years to come you will be investing lumps many times what you are worried about now.

One caveat is that given your low tolerance risk profile make sure you are confident about your asset allocation

AD700

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Re: 12k lump sum to invest
« Reply #7 on: June 05, 2018, 12:50:41 AM »
Thanks for the feedback.

I know what the right thing to do is, and I will do it. It just feels like it's not very good timing..

I actually have a high risk tolerance and am not worried that I will get nervous and sell when the market drops. I just wish it wasn't so many years into a bull run. It seems like I will be buying high.


Mr Mark

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Re: 12k lump sum to invest
« Reply #8 on: June 05, 2018, 08:08:02 AM »
...
 It seems like I will be buying high.

In 20 or 30 years time you can look back at that statement - flush with youth as it seems - and laugh and laugh and laugh.

solon

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Re: 12k lump sum to invest
« Reply #9 on: June 05, 2018, 10:12:43 AM »
VTSAX. In a tax-favored account, if possible. Do it now. Don't look back.

solon

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Re: 12k lump sum to invest
« Reply #10 on: June 05, 2018, 10:13:40 AM »
By the way, did something important happen in AD700?

jacoavluha

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Re: 12k lump sum to invest
« Reply #11 on: June 05, 2018, 10:22:09 AM »
I guess I'll be the contrarian and say "it depends". I assume these are post-tax dollars you're planning to invest in a taxable brokerage account? If this is fully 10% of your net worth, are you sure there is no possibility you'll need to touch or access this money any time in the near future? Like, if you couldn't touch it for 10 years you'd be fine? You have an emergency fund? You have no debt? You have no short term obligations (taxes, etc)? Do you have a 401k? And/or an IRA? Have you maxed out tax-advantaged space?

AD700

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Re: 12k lump sum to invest
« Reply #12 on: June 05, 2018, 11:03:11 AM »
I guess I'll be the contrarian and say "it depends". I assume these are post-tax dollars you're planning to invest in a taxable brokerage account? If this is fully 10% of your net worth, are you sure there is no possibility you'll need to touch or access this money any time in the near future? Like, if you couldn't touch it for 10 years you'd be fine? You have an emergency fund? You have no debt? You have no short term obligations (taxes, etc)? Do you have a 401k? And/or an IRA? Have you maxed out tax-advantaged space?

Thanks for the advice. I will be able to invest in an index fund through a tax-advantaged space. So that's not a problem.

If I invest it, I will consider it untouchable for the foreseeable future and am confident in sticking to that, but I'd still rather not watch it achieve negative returns for a decade.

I should clarify, this would not be 10 per cent of my NW, but 10 per cent of my equity investments. In addition, I have an emergency fund made up of CDs laddered to ensure a supply of cash is available if needed. I have no debt, but no assets (like property) either.

If it influences anything, in the short-term I am also in a position to be able to save a significant portion of my net income, so I will have a reasonable amount to invest (or save) each month until at least the end of the year (approx. 5k per month).
« Last Edit: June 05, 2018, 11:08:20 AM by AD700 »

AD700

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Re: 12k lump sum to invest
« Reply #13 on: June 06, 2018, 05:48:48 AM »
By the way, did something important happen in AD700?

Lots of things happened (https://en.wikipedia.org/wiki/700) ... take your pick.

solon

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Re: 12k lump sum to invest
« Reply #14 on: June 06, 2018, 10:29:00 AM »
By the way, did something important happen in AD700?

Lots of things happened (https://en.wikipedia.org/wiki/700) ... take your pick.

I was just wondering if there is a story behind your name...

aboatguy

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Re: 12k lump sum to invest
« Reply #15 on: June 07, 2018, 05:29:44 PM »
Looks like you are uncomfortable going all in.  Personally I'd put it all in, but then again maxing out my wife's Roth IRA and my Roth IRA in the beginning of  January doesn't look like it was the best option this year.  However, we did  it and will live with it and on 31 December 2018 we will electronically move funds to our Roths and fully fund them again for next year.  IMO its time in the market.  It seems to me that every-time I had a feeling and tried to market time, I did not come out ahead.  My wife and I put money in the market as soon as possible (in accordance with our investment plan). 

So next year's Roth funds are being placed in a 2.5% CD that matures on 15 December only have 2 more weeks until 2019 Roth is funded.

So to end a long story if your uncomfortable putting it in now divide it up, invest the max you are comfortable with now, place the rest somewhere that it doesn't lose value and drip it in to the market as fast as you "comfortably can"   

ysette9

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Re: 12k lump sum to invest
« Reply #16 on: June 07, 2018, 07:28:09 PM »
My vote is to jump into the deep end of the pool by throwing it all into the market. My personal favorite has been a combo of VTSAX and VTIAX.

Then go read a good book or take a hike. Enjoy a glass of wine. Do NOT obsessively check the balance. Check it à year from now. If you don’t need it for a long time then let it just do its thing. It is like sautéing unions to caramélise them: you need to just let them be for best results.

AD700

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Re: 15k lump sum to invest
« Reply #17 on: June 14, 2018, 12:51:49 AM »
Update:

I decided to throw it all in. Now, market crash in 3, 2 1 .

Mr Mark

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Re: 15k lump sum to invest
« Reply #18 on: June 14, 2018, 01:07:48 AM »
Update:

I decided to throw it all in. Now, market crash in 3, 2 1 .

Again, even if this happens - it doesn't matter. What matters is what that investment is going to be worth in 20 years time. The paper value is ephemeral.  When the market drops a bit - and it will - you've only lost money if you sell. You should be investing "buy and hold" in the entire market. Not 'trading' and trying to buy and sell with the short term gyrations.