Hi all, newcomer here, but have been following MMM on and off for years, love the guy! I have a question regarding moving investments from one asset class to another.
Up until recently, 100% of my investments have been in real estate (industrial and residential property). Although this strategy has worked well for me, I understand the folly in having all one's investments in a single asset class.
In addition, I'm at a bit of a turning point in life and crave more freedom to travel to countries I haven't seen yet, do extended hikes in remote areas with no internet access, and so on - without having to worry about issues cropping up with maintenance, tenants, etc.
So basically my goals are:
1. Passify my income stream.
2. Diversify my investments.
I've recently sold one property and I'm about to sell another, and should end up with about $800,000 to invest. I'm considering investing this money into a few ETFs - here in New Zealand there are some good high-dividend ETFs (for example, gross dividends of about 4.75% or 3.5%), and probably I'd include other ETFs with exposure to overseas stockmarkets.
The trouble is, our little stockmarket here in NZ has experienced massive gains over the last few years and is sitting pretty high, and of course there are murmers floating around of major crashes and economic downturns. So I'm loathe to invest a significant sum of money all at once and then see it possibly plummet in value during the next correction. I know, markets almost always recover eventually, nevertheless it would be a tough thing to watch!
So I'm reaching out to those with more experience in this area - what's the best approach? Should I put in say $200K initially then drip-feed the rest in over the next year or two to take advantage of dollar-cost averaging?
Many thanks in advance!
Pete.