Author Topic: Investing Small Amount - Get in now or after next recession?  (Read 156 times)

Bales9er

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My wife and I would like to invest the money in our son's savings account ($3,000) in a basic Vanguard index fund. He's only 4 so this is a long term plan to help his money work best for him. We would like to do it sooner than later to get the ball rolling but since we're currently in the longest stretch between recessions that we've ever had, we're afraid that if we invest it now and the bottom falls out soon it may be the wrong time. My thought, which may be completely wrong, is that since the balance will be so low that if the market tanks he may lose all of it before it even has a chance to grow. Am I wrong for having that mindset? Should we hold off for now until that next recession does hit and then buy in after? We are complete newbies at this, hence the question.

Cromacster

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Yes, you have the wrong mindset.

If you bought $3,000 of VTSAX (I think you can get in for 3k now) you would have around 45 shares.  Market goes up, you have 45 shares. Market goes down, you have 45 shares.  Every quarter you get dividiends and more shares.

You are never going to "lose it all" unless you panic and sell.

"The best time to plant a tree is yesterday"

coppertop

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Here's a question I have about that:  minimum to invest is $3,000.  I invested $3,000 in a Vanguard fund in June.  Looked this morning and it's down to $2,974, which is now below the minimum to invest.  Will Vanguard want me to divest myself of that fund?  I have traditional, Roth IRA's as well as taxable funds already in Vanguard, so it's not the only money I have there. 

SwitchActiveDWG

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Here's a question I have about that:  minimum to invest is $3,000.  I invested $3,000 in a Vanguard fund in June.  Looked this morning and it's down to $2,974, which is now below the minimum to invest.  Will Vanguard want me to divest myself of that fund?  I have traditional, Roth IRA's as well as taxable funds already in Vanguard, so it's not the only money I have there.

No they won’t.