Hey friends, I've got a question from a relative noob. I've recently read some books about index investing, discovered MMM, etc. Figured out how terrible financial advisors are.
Anyway, I'm 31 and I've got about $65,000 that I had invested in mutual funds, that I am now in the process of removing. I'm about to re-invest them in index funds and bonds, and then will proceed with contributing and investing monthly.
Now, I know it's not good to time the market, and better to just contribute every month regardless of what's going on. I get that. But is it the same if you have a big lump sum? I'm confused about this. From what I've read in the books about indexing (ex. Millionaire Teacher), you get more for your money if you buy stocks when the market is in recession, because the stocks cost less. Makes sense.
So my question is... since we're at the top of a boom right now, and assuming a recession is coming at some point soonish (
http://www.mrmoneymustache.com/2017/06/20/next-recession/) .... is it a bad idea to invest a lump sum right now? I would rather just stick it all in and be done with it, but am I cheating myself out of a lot of potential returns by doing it now and not waiting a little bit?
Although, to be honest, I've already taken the money out of the mutual funds, so it needs to get invested regardless... I guess perhaps the question is what kind of stock bond allocation it should go into. Normally I would choose something like 80/20 stocks/bonds or 70/30 ... but would it make sense to perhaps put it in at 40/60 stock/bonds for now, and then when the market goes down, sell a bunch of the bonds and stock at that point to get the 70/30 allocation? Would there be benefit to this approach?
What would you do?
Thank you so much for the help!