How Should I invest after a rollover?

[BrianT]

Hi Everyone,

I am 31 years old right now, and have about $129,000 in a 401k account from a previous employer. The money is spread over several index funds that essentially mimic the ever so popular total market index fund. I am thinking about rolling over the money into a Fidelity Traditional IRA (my other investment accounts are also with Fidelity) and putting the money into FSTMX.

Usually after the rollover, the money is sitting in cash again. Should I dump all $129,000 into FSTMX in one shot, or take a dollar averaging approach over a specified period of time? For example, lets say instead of throwing $129,000 straight into FSTMX, I spread the buying over 10 years, on a monthly basis. So that means I would be putting in ~$1075 each month into this fund.

If you guys can help by providing input or giving a web site with a good calculator, I would appreciate it so much!

[taekvideo]

Statistically, if you have the money now, it's better to put it all in at once.
You'd miss out on a lot of gains if you spread it out, especially over 10 years (the stock market tends to triple every 11 years or so...)

[matchewed]

All in now based on your asset allocation. It was good for you invested in a Total Market equivalent just a few days ago, what has changed?

[Brian Fellows]

Invest it all now.  Time in the market is way more important than timing the market when you're talking about that much money and that long of a time period.

[BrianT]

Cool, thanks guys!

[wizlem]

Because you are invested already you should get your money back in as soon as possible. You wouldn't randomly convert your investments to cash and then dollar cost average that so why do it here?

[neo von retorch]

I wish I had read this thread a year ago!!

[wtjbatman]

I wish I had read this thread a year ago!!

It didn't exist a year ago.

... or did it?

[TomTX]

I wish I had read this thread a year ago!!

It didn't exist a year ago.

... or did it?

I think this thread (or effectively the same thread) tends to exist fairly frequently....

[wtjbatman]

I wish I had read this thread a year ago!!

It didn't exist a year ago.

... or did it?

I think this thread (or effectively the same thread) tends to exist fairly frequently....

I'm about to post a thread asking whether an 80/20 asset allocation is too risky for me, or if I should stick with 70/30. I expect a well throught out response from you, matchewed, and either warfreak or arebelspy. Don't worry, I won't include a case study. No reason to make it easy on you guys.

[neo von retorch]

Quantum thread reading aside, a cautionary tale for those in the lurch -- I left a lot of money un-invested a year ago, and obviously am not pleased with the 16-20% return on the "overvalued" market. ;-)

[BrianT]

Because you are invested already you should get your money back in as soon as possible. You wouldn't randomly convert your investments to cash and then dollar cost average that so why do it here?

When you say it this way, it does sound silly. A few moments ago I put most of the money into the fund, and a fair amount in Berkshire Hathaway. Cheers to FIRE!