Author Topic: NOV 2018 - Constipated... Timing my entry into Indexes  (Read 876 times)

andersoncp1

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NOV 2018 - Constipated... Timing my entry into Indexes
« on: November 20, 2018, 01:12:09 PM »
I just got turned on to MMM and FIRE..  And I know, I know.. we're not supposed to time the market.  ...however, given the recent volatility (where it's already had some big drops in the last two months.. and everyone is expecting it to take a dump soon) do I wait to get into indexed funds?  I hate to buy in now, and then have the value drives off a cliff.  I know it will come back up... but it seems dumb to go in if its widely thought that there is a tumble coming.  Thoughts?

Do I wait?  How long do I wait?  If waiting, what sign should I look for as the trigger to get me into the market? 

I have about $350K haphazardly sitting.. doing nothing for me right now and am not sure if I'm a genius or an idiot for sitting on my hands.  (ei: I literally have $150K sitting in checking accounts.  Duh right!?)

teltic

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #1 on: November 20, 2018, 01:25:02 PM »
Woah you have a shit ton of cash!

The stock market is having a black friday sale right now.

No one has a crystal ball.  No one knows when it will crash, or when it will rip. What we do know is there has been a good size drop in the last 2 weeks.  You're a lucky suckka for having cash to take advantage of this dip!!!

If you are really worried... Allocate it better.  Maybe 50% US 50% international.... Maybe add in real estate (I use fundrise.com).  Maybe add in peer to peer lending (I use prosper.com). Maybe bonds.  If you think stocks will blow up and disapear, buy some gold.

Worst case scenario you need your cash in a high yield savings accounts.  I'm seeing advertisements for 2%...

For me, it's easier to simply dollar cost average into the market.  It might be easier for you to buy in 10-20% of your cash per week.  Then if it keeps going lower, you'll be happy to buy at lower prices... If it goes up week after week... You'll still feel good about yourself since you've made money.
« Last Edit: November 20, 2018, 01:26:50 PM by teltic »

leavesofgrass

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #2 on: November 20, 2018, 01:38:34 PM »
Does dumping $350K into an equity index fund jive with your asset allocation? You first need to figure out your investment strategy and look at your portfolio as a whole. Maybe you've already done that. Will you still have cash on hand for emergencies? How long do you intend to keep this money invested?

I also have a substantial amount sitting in tax-exempt MM and taxable MM accounts that needs to go into VTI.  My plan is to DCA over the next year or so.

While you think about your options, at least move this cash somewhere other than a checking account so you can earn some interest! I'd move it to a MM account at a brokerage so when you're ready to pull the trigger and invest in an index fund, you don't have to wait for your account to fund.

Rob_bob

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #3 on: November 20, 2018, 01:52:19 PM »
Figure out your asset allocation.  Take 50% of equity funds and put it in the market now.  Divide the rest by 12 and invest each month over the next year.

Today might be the market low for the next 5 years...or it might not be.

Saving in Austin

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #4 on: November 20, 2018, 02:20:19 PM »

Jon Bon

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #5 on: November 20, 2018, 02:36:44 PM »
When I have a bunch of cash I tend to buy about 10 grand every few weeks until I ''spend' it all. Probably makes zero difference but it makes me feel better about the issues you are currently having.

Good luck.

andersoncp1

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #6 on: November 20, 2018, 08:54:48 PM »
Thanks all for your input.  Maybe I should back up a bit though...  How does one decide upon an asset allocation strategy?  Yep..  total noob here and would greatly appreciate any guidance or URLs to any sites or articles that would help me to define this better.  Thanks for all the great advice.

robartsd

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #7 on: November 20, 2018, 09:03:46 PM »
Asset allocation depends on investment timeline and risk tolerance.

Here's the most commonly cited reference for learning about investing:https://jlcollinsnh.com/stock-series/

leavesofgrass

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Re: NOV 2018 - Constipated... Timing my entry into Indexes
« Reply #8 on: November 20, 2018, 09:14:29 PM »
Also read: https://www.bogleheads.org/wiki/Asset_allocation

The Bogleheads forum is very informative and you can learn a lot through other people's questions. Or ask some yourself:
https://www.bogleheads.org/forum/viewforum.php?f=1&sid=3237ecb5923620ec16e82194b897403d