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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Beach_Stache on July 20, 2016, 09:30:21 AM

Title: $15k, Invest Now or Wait?
Post by: Beach_Stache on July 20, 2016, 09:30:21 AM
I've got about $15k or so to invest right now, $5.5 for Roth IRA for 2016 and another $10k to go to taxable account.  I'm very surprised that the DOW is up so high and honestly I'm waiting for it to drop a bit before throwing that kind of money in the market and right now it's sitting in a 0.75% Capital One Savings Account. 

I'm not one of those guys who thinks he can time the market or pick the right fund, I'm just going to invest it all in FUSVX and let it sit and keep investing every month.  Of course I don't want to invest at the top of the market though and then lose money.  I don't think we're in for doom, but I just get the feeling that the DOW is going to sit more around 18000 than 18500 that it's around now.  I know nothing, just seems too high, no particular reason for guesing that.

I try not to have too much emotion in the market, just keep adding and let it sit for the next few decades.  Am I being silly, and should I just put the money in now, or should I wait to see if it lowers to 18000 or wait for a bad day in the market and put it in the following day?  Or should I do some dollar averaging and put in a few grand now and anotehr $1k each month until it's out?  I typically don't have this much to invest, I just contribute a few hundred bucks/month to my post tax (after maxing out my TSP), it just makes me nervous to put that much in all at once to them see the DOW drop 1000 points or so.  Any advice is appreciated!
Title: Re: $15k, Invest Now or Wait?
Post by: Derrian on July 20, 2016, 09:39:54 AM
Totally get where you're coming from. When I started investing 3 years ago, I kept hearing how markets are at an all time high and there will be an impending crash. The S&P 500 was around 1700 then, now it's at 2150. If I had waited I would have missed out on all the market gains and dividends.

By waiting for a drop, you are, in fact, trying to time the market. Personally, I would revisit my asset allocation to make sure I can stomach the drops and not worry about buying on top (I bought on top last week and feel great... I also bought on top for most of 2015 when the S&P 500 was at its previous high). If you are still nervous you could dollar cost average into the markets by investing 3k at the beginning of each months for 5 months. Stocks may go up or down over that period resulting in additional gains or losses.

 The general rule of thumb though is that time in the market is what matters, not so  much a difference of 3% in purchase price. 20 years from now if that 3% on that one purchase really matters, we will have much bigger concerns to worry about...
Title: Re: $15k, Invest Now or Wait?
Post by: soccerluvof4 on July 20, 2016, 05:30:09 PM
^+1 for the most part. I was the same way so took my $ divided by 12 months and put it in that way.  But now the market is pretty pretty toppy so while I agree there is no time like now I would keep 25-30% in cash and by the dip. Who knows where its going to go but I think you can get a lower purchase point than here so keeping some cash aside might not be a bad time right now.
Title: Re: $15k, Invest Now or Wait?
Post by: tomatops on July 21, 2016, 06:54:00 AM
I agree with the previous poster: buy some now, keep some cash handy for the dips.
Title: Re: $15k, Invest Now or Wait?
Post by: doodleranch on July 21, 2016, 06:59:40 AM
I am also going to put it a small amount now but wait for a dip.   Every time it dips even lower,  I will add even more :)    Is that considered timing the market?
Title: Re: $15k, Invest Now or Wait?
Post by: nereo on July 21, 2016, 07:13:47 AM
I am also going to put it a small amount now but wait for a dip.   Every time it dips even lower,  I will add even more :)    Is that considered timing the market?

Yes.  Most of the time it's a loosing strategy.  Here's a study Vanguard did (https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiL_on60ITOAhVJbSYKHa3kAQEQFggdMAA&url=https%3A%2F%2Fpressroom.vanguard.com%2Fnonindexed%2F7.23.2012_Dollar-cost_Averaging.pdf&usg=AFQjCNEHt7rk1y3ZS7cd6lWJ19ErnkBLcA) looking at this very question.  tl/dr: lump sum investing beat out other strategies about 80% of the time.

OP:  you will never know the 'best' time to put money into a broad-market fund like FUSVX, and you also miss out on dividends the longer you keep that cash on the sidelines. Time in the market matters far more than timing the market.
Title: Re: $15k, Invest Now or Wait?
Post by: talltexan on July 21, 2016, 07:16:52 AM
The optimal allocation for most people is not 100% in stocks. If you put 85% in stocks (say VTSAX), and 15% in bonds (say an etf like TLT), then--if it does crash--you'll be able to rebalance. Worrying about the market crashing is a sign that you're considering too aggressive an allocation.
Title: Re: $15k, Invest Now or Wait?
Post by: beastykato on July 21, 2016, 12:53:46 PM
Go ahead and lump in it in increments if you so choose.  Around here it's like heresy to say that, and anything you do that isn't an immediate influx of money into your account is "timing".  If you just ease the money in over a small time frame, say the remainder of the year and/or six months, that's dollar cost averaging in my book.  Like you I expect some volatility in the market due to the elections and fed trying to raise rates. 

Buy some dips it's not as hard as some people make it out to be.  Although, I check and look at my stocks on a daily basis on my phone apps.  So, when the market moves down 3% on a day I'll move my money in.  If it's up 3% that day I won't.  It's really common sense. 

With that said, I do agree with the general message most guys here are trying to communicate to you.  You shouldn't just sit on cash forever waiting for an opportunity that may never come on a hunch.   Lay out a plan like "I'll put in 1/6 of my money over the next six months", and make sure you stick to it.  You may get a great buying opportunity on a 5-10% dip, you may not but then life goes on and you still put it in on your schedule and you gained flexibility. 
Title: Re: $15k, Invest Now or Wait?
Post by: Spitfire on July 21, 2016, 01:39:03 PM
Lay out a plan like "I'll put in 1/6 of my money over the next six months", and make sure you stick to it.  You may get a great buying opportunity on a 5-10% dip, you may not but then life goes on and you still put it in on your schedule and you gained flexibility.

If you aren't going to invest it all at once, this is what you should do. Average your costs across a period of time, but stick to it.
Title: Re: $15k, Invest Now or Wait?
Post by: nereo on July 21, 2016, 01:50:37 PM
To build on what beastykato& spitfire are saying...
Lump Sum is when you invest all the money you have, all at once.

Dollar Cost Averaging (DCA) is when you plan to invest the money over a pre-defined set of time.  Example:  $1,000 every month for the next 15 weeks. Overall Lump Sum beats out DCA, but the differences are small and if it eases your mind to do it over a period of weeks or months, so be it.  Just don't stretch it out into multiple years.

Market Timing is when you set up conditions (e.g. when the market drops 10%) or make your decision based on some bit of news or even a feeling (the guy on tv said buy!). Except for a skilled few and some lucky people, it doesn't work. Professionals have already absorbed all the information you have and more, and chances are it's already been accounted for in the market price.  Certain things, like individual small-cap stocks can slip by, but if you're investing in a broad index fund your fighting the emotions of a few million other people and the near-continous trading of hedge-funds pushing B$ from asset A to B.
Title: Re: $15k, Invest Now or Wait?
Post by: Zoot Allures on July 21, 2016, 04:12:05 PM
Am I being silly

Yeah, pretty much. If you're investing for the long term, you might as well throw it in now. Even after the inevitable correction (which could be tomorrow or a year from now), the market will go up again, and that cycle will repeat itself over and over again. Twenty years from now it really won't matter when exactly you got in.
Title: Re: $15k, Invest Now or Wait?
Post by: Shor on July 21, 2016, 04:33:12 PM
Wait.. I'm getting a sign here..... Yes, yes, it's coming in quite clearly... A?.. do you know A? A name, a place?.. Oh wait, it's coming in much clearer now! B!? B? Boy? No, no boys.. buy? Yes, Buy! Yeah, I'm getting very clearly that you should buy now and .. what's this... "Don't worry about the money." Yes, they want you to buy now, don't worry about the money, and sleep well at night..!

I don't know, I'm just channeling what I see..
Don't give me that look..
y'know all this negative energy is really blocking my psychic prowess..
Title: Re: $15k, Invest Now or Wait?
Post by: Curbside Prophet on July 21, 2016, 06:06:03 PM
I think the market is overvalued right now. 

http://www.multpl.com/shiller-pe/ (http://www.multpl.com/shiller-pe/)

That being said, I still invest regularly.  Why?  Because if I could time the market, I would be sipping whisky on the beach rather than sitting at my job.  As long as you don't need the money for many years, I would invest it lump sum. 
Title: Re: $15k, Invest Now or Wait?
Post by: gggggg on July 21, 2016, 06:57:42 PM
You could plunk a fat chunk in now, and dollar cost average the rest, if you can't decide. There's just no way of telling what the market future is.
Title: Re: $15k, Invest Now or Wait?
Post by: Beach_Stache on July 22, 2016, 07:40:52 AM
Wait.. I'm getting a sign here..... Yes, yes, it's coming in quite clearly... A?.. do you know A? A name, a place?.. Oh wait, it's coming in much clearer now! B!? B? Boy? No, no boys.. buy? Yes, Buy! Yeah, I'm getting very clearly that you should buy now and .. what's this... "Don't worry about the money." Yes, they want you to buy now, don't worry about the money, and sleep well at night..!

I don't know, I'm just channeling what I see..
Don't give me that look..
y'know all this negative energy is really blocking my psychic prowess..

Haha, reminds me of that south park episode!  I guess end result is I have no idea and dollar cost averaging or lump sum just get it in the market and the 20-30 years of ups and downs will sort things out.
Title: Re: $15k, Invest Now or Wait?
Post by: dividendman on July 22, 2016, 11:21:47 AM
I think the market is overvalued right now. 

http://www.multpl.com/shiller-pe/ (http://www.multpl.com/shiller-pe/)

That being said, I still invest regularly.  Why?  Because if I could time the market, I would be sipping whisky on the beach rather than sitting at my job.  As long as you don't need the money for many years, I would invest it lump sum.

What the hell??? Do people actually sip whisky on a beach??

I get sipping whisky in a bar, or at home, or at a party indoors, or in the winter outside somewhere.... but on a beach? Crazy.
Title: Re: $15k, Invest Now or Wait?
Post by: rugorak on July 22, 2016, 12:33:46 PM
Don't time the market. Time yourself. If you need the money in the near future (whatever is near future to you) keep it in cash. If not invest.

http://jlcollinsnh.com/2012/04/19/stocks-part-ii-the-market-always-goes-up/
Title: Re: $15k, Invest Now or Wait?
Post by: dcheesi on July 22, 2016, 12:45:44 PM
Totally get where you're coming from. When I started investing 3 years ago, I kept hearing how markets are at an all time high and there will be an impending crash. The S&P 500 was around 1700 then, now it's at 2150. If I had waited I would have missed out on all the market gains and dividends.

By waiting for a drop, you are, in fact, trying to time the market. Personally, I would revisit my asset allocation to make sure I can stomach the drops and not worry about buying on top (I bought on top last week and feel great... I also bought on top for most of 2015 when the S&P 500 was at its previous high). If you are still nervous you could dollar cost average into the markets by investing 3k at the beginning of each months for 5 months. Stocks may go up or down over that period resulting in additional gains or losses.

 The general rule of thumb though is that time in the market is what matters, not so  much a difference of 3% in purchase price. 20 years from now if that 3% on that one purchase really matters, we will have much bigger concerns to worry about...
This. I'm the guy who waited, thanks to advice from my "stock-wiz" buddy. He was so sure the market had peaked that he was actively betting against the market (shorting stocks). He wound up losing his shirt, and I missed out on another several months of gains (finally got in at 1800, vs. ~1600 when I first looked at it).
Title: Re: $15k, Invest Now or Wait?
Post by: Curbside Prophet on July 22, 2016, 03:14:49 PM
I think the market is overvalued right now. 

http://www.multpl.com/shiller-pe/ (http://www.multpl.com/shiller-pe/)

That being said, I still invest regularly.  Why?  Because if I could time the market, I would be sipping whisky on the beach rather than sitting at my job.  As long as you don't need the money for many years, I would invest it lump sum.

What the hell??? Do people actually sip whisky on a beach??

I get sipping whisky in a bar, or at home, or at a party indoors, or in the winter outside somewhere.... but on a beach? Crazy.

There's no bad location for whisky.  The adage is usually sipping Mai Tai's on a beach but I hate Mai Tai's so I changed it.  Substitute w/ beer if you like.   
Title: Re: $15k, Invest Now or Wait?
Post by: Retire-Canada on July 23, 2016, 06:14:56 PM
I dumped ~$200K into the market in early 2016. Glad I didn't fuck around....got dividends and all my ETFs are priced higher now.

Have money? Invest it and stop thinking about it. Repeat as needed.
Title: Re: $15k, Invest Now or Wait?
Post by: JAYSLOL on July 24, 2016, 12:09:38 AM
I would probably put it all in fairly evenly across the next few months.  Maybe $3k-$5k/month and try to stick to it (almost) no matter what the market does.  My accounts are set up to purchase funds automatically and i almost always let them do that, but i do keep an eye on the prices and if there is a significant dip, i just throw money in early.  After 2 days of dropping prices from the "Brexit" vote i put 2 months worth of purchases all in early and got a slightly better deal than if i were letting them go in automatically now that the prices are higher, but honestly it just as easily could have gone the other way and i could have done better leaving it alone. 

Someone else posted a link to this a while back on one of the threads, it's a great take on why diligent savers don't need to worry too much about timing the market.

http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
Title: Re: $15k, Invest Now or Wait?
Post by: rhecarunoid on July 27, 2016, 03:49:15 AM
I donīt buy the "donīt time the market argument" which you usually hear from the usual suspects out of the Modern Portfolio Theory MPT and ETF corner. It means: the experts have proven with stochastic means that you canīt distinguish 2 prices.
Nonetheless: I donīt believe that buying at an all time high of most american stock indexes as a good idea. I myself came to the insight to stop thinking like a person saving money on a bank account and start thinking like an investor. And I prefer to wait a bit for a better moment to get re-invested into an ETF on the S&P500. 
Title: Re: $15k, Invest Now or Wait?
Post by: boarder42 on July 27, 2016, 04:39:50 AM
I donīt buy the "donīt time the market argument" which you usually hear from the usual suspects out of the Modern Portfolio Theory MPT and ETF corner. It means: the experts have proven with stochastic means that you canīt distinguish 2 prices.
Nonetheless: I donīt believe that buying at an all time high of most american stock indexes as a good idea. I myself came to the insight to stop thinking like a person saving money on a bank account and start thinking like an investor. And I prefer to wait a bit for a better moment to get re-invested into an ETF on the S&P500.

And when you wait and miss a 10% run up then buy on a 5% drop I'm sure you'll think it's justified
Title: Re: $15k, Invest Now or Wait?
Post by: Kaspian on July 27, 2016, 10:06:24 AM
And when you wait and miss a 10% run up then buy on a 5% drop I'm sure you'll think it's justified

^^ This.  "Yay, I bought a dip!!"  :/
Title: Re: $15k, Invest Now or Wait?
Post by: JumpInTheFIRE on July 29, 2016, 11:27:58 AM
I donīt buy the "donīt time the market argument" which you usually hear from the usual suspects out of the Modern Portfolio Theory MPT and ETF corner. It means: the experts have proven with stochastic means that you canīt distinguish 2 prices.
Nonetheless: I donīt believe that buying at an all time high of most american stock indexes as a good idea. I myself came to the insight to stop thinking like a person saving money on a bank account and start thinking like an investor. And I prefer to wait a bit for a better moment to get re-invested into an ETF on the S&P500.

That's poor reasoning.  The market in general goes up, so it hits new "all time highs" constantly.  Heck, if you search for "stock market all time highs" on google you get thousands of articles (all from different times) about how the stock market is in unseen territory.  P/E ratios are a little more convincing since they are based on actual earnings but just saying the price of a certain index (which can change its constitution over time and is often is not even the index being invested in) is too high seems silly.
Title: Re: $15k, Invest Now or Wait?
Post by: nereo on July 29, 2016, 03:51:03 PM
I donīt buy the "donīt time the market argument" which you usually hear from the usual suspects out of the Modern Portfolio Theory MPT and ETF corner. It means: the experts have proven with stochastic means that you canīt distinguish 2 prices.
Nonetheless: I donīt believe that buying at an all time high of most american stock indexes as a good idea. I myself came to the insight to stop thinking like a person saving money on a bank account and start thinking like an investor. And I prefer to wait a bit for a better moment to get re-invested into an ETF on the S&P500.

That's poor reasoning.  The market in general goes up, so it hits new "all time highs" constantly.  Heck, if you search for "stock market all time highs" on google you get thousands of articles (all from different times) about how the stock market is in unseen territory.  P/E ratios are a little more convincing since they are based on actual earnings but just saying the price of a certain index (which can change its constitution over time and is often is not even the index being invested in) is too high seems silly.

Fun facts!*:  The SP500 has been within 5% of an "all time high" 36% of all trading days since 1928. It's been within 10% of it's all time high 51% of the time.

*fun facts seemed relevant to the discussion.
Title: Re: $15k, Invest Now or Wait?
Post by: beastykato on July 29, 2016, 06:23:39 PM
All the more reason to take advantage of a significant dip when it occurs.    ;)

Just baiting of course because even though I'm very contrarian on this I do invest religiously with 90% of my money.  Love big dips though so there is some truth to the statement made.

Title: Re: $15k, Invest Now or Wait?
Post by: 2Birds1Stone on July 29, 2016, 08:20:12 PM
I wish you the best of luck, like investing and the DOW dropping 50%.

Stocks on sale@!
Title: Re: $15k, Invest Now or Wait?
Post by: MoonLiteNite on August 02, 2016, 03:15:43 AM
Totally get where you're coming from. When I started investing 3 years ago, I kept hearing how markets are at an all time high and there will be an impending crash. The S&P 500 was around 1700 then, now it's at 2150. If I had waited I would have missed out on all the market gains and dividends.

This guy ^^^^

The longer the wait, the more it will go up.
There is always the chance there will be a down swing right after, but oh well. The odds of it going up while you wait is much higher than it going down.
Unless you know something!??!?!?!
Title: Re: $15k, Invest Now or Wait?
Post by: ooeei on August 02, 2016, 06:34:28 AM
I am also going to put it a small amount now but wait for a dip.   Every time it dips even lower,  I will add even more :)    Is that considered timing the market?

Yes.  Most of the time it's a loosing strategy.  Here's a study Vanguard did (https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiL_on60ITOAhVJbSYKHa3kAQEQFggdMAA&url=https%3A%2F%2Fpressroom.vanguard.com%2Fnonindexed%2F7.23.2012_Dollar-cost_Averaging.pdf&usg=AFQjCNEHt7rk1y3ZS7cd6lWJ19ErnkBLcA) looking at this very question.  tl/dr: lump sum investing beat out other strategies about 80% of the time.

OP:  you will never know the 'best' time to put money into a broad-market fund like FUSVX, and you also miss out on dividends the longer you keep that cash on the sidelines. Time in the market matters far more than timing the market.

Yup, I like referencing this study too. 

OP, I think about it like I'm dollar cost averaging over my life.  Chances are, you'll have a few $10-15k "lump sums" throughout your life.  Let's pretend for argument's sake you'll have 5.  That means if you invest each of them as soon as you get them, 4 of them will do better than if you'd waited, and 1 won't.  It makes sense to invest immediately in this scenario, even though occasionally it will seem like you made the wrong choice.

The only situation I could see where you might not want to lump sum is a "once in a lifetime" inheritance or something that is totally life changing.  Say I inherit $2 million tomorrow.  I might invest that over time since I'm more concerned with avoiding poor returns than I am with getting optimal returns.  Then again, I could also just invest it with a different allocation and get the same effect.

Title: Re: $15k, Invest Now or Wait?
Post by: beastykato on August 02, 2016, 07:51:12 AM
How are these studies done though?  A smart investor can look and analyze and index or stock and determine if it's valued too high or too low.  When the study puts lump vs DCA does it assume the DCA investor is a brain dead moron who can't see that something is overvalued?

DCA is safer in my opinion, it leaves you flexible with the cash for other needs, and IF the opportunity comes and a major dip happens you can push in a larger portion or all of the money.  People say you will lose out on dividends and crap during that time, but 2%/yr kinda pales in comparison to a 5% drop.

If you're a set and forget it type I can see how the lump would win more often then not.  If you're active though, I'd avoid it unless the situation were different.  If we were all saying "the markets at all time lows"  I'd have no problem lumping it in.
Title: Re: $15k, Invest Now or Wait?
Post by: boarder42 on August 02, 2016, 08:24:11 AM
How are these studies done though?  A smart investor can look and analyze and index or stock and determine if it's valued too high or too low.  When the study puts lump vs DCA does it assume the DCA investor is a brain dead moron who can't see that something is overvalued?

DCA is safer in my opinion, it leaves you flexible with the cash for other needs, and IF the opportunity comes and a major dip happens you can push in a larger portion or all of the money.  People say you will lose out on dividends and crap during that time, but 2%/yr kinda pales in comparison to a 5% drop.

If you're a set and forget it type I can see how the lump would win more often then not.  If you're active though, I'd avoid it unless the situation were different.  If we were all saying "the markets at all time lows"  I'd have no problem lumping it in.

when is it valued too high though what shiller PE10 are you shooting for ... you would have missed major runups in the 90s .com bubble if you had one around the PE10 we're at right now.
Title: Re: $15k, Invest Now or Wait?
Post by: ooeei on August 02, 2016, 08:37:21 AM
How are these studies done though?  A smart investor can look and analyze and index or stock and determine if it's valued too high or too low.  When the study puts lump vs DCA does it assume the DCA investor is a brain dead moron who can't see that something is overvalued?

DCA is safer in my opinion, it leaves you flexible with the cash for other needs, and IF the opportunity comes and a major dip happens you can push in a larger portion or all of the money.  People say you will lose out on dividends and crap during that time, but 2%/yr kinda pales in comparison to a 5% drop.

If you're a set and forget it type I can see how the lump would win more often then not.  If you're active though, I'd avoid it unless the situation were different.  If we were all saying "the markets at all time lows"  I'd have no problem lumping it in.

If you just go back 20 years in 1995 the S&P 500 was at 465, which would be a 75% drop from the beginning of this year.  If you're waiting for a 75% drop to get in the market, you're probably going to be waiting a good long while. 

If you really want an "all time low" in 1878 it was at 3.25, or a 99.8% drop from the beginning of this year.

The very important question that you seem to have glossed over is:  At what point do you get in, and how long do you wait for that to happen?  Predicting and timing the market is one of those things that at first sounds really easy to do (buy when it's undervalued, sell when it's overvalued, DUH), but in practice is arguably impossible. 
Title: Re: $15k, Invest Now or Wait?
Post by: beastykato on August 02, 2016, 09:52:32 AM
I'm not glossing over anything.  I'm advocating religiously investing regardless of market price. So, no where did I say to avoid entering the market.   However, if you DCA and actively watch your investments you can take advantage of significant opportunities.  IMO as opposed to blindly throwing everything you got in without taking anything into account.
Title: Re: $15k, Invest Now or Wait?
Post by: ooeei on August 02, 2016, 10:01:39 AM
I'm not glossing over anything.  I'm advocating religiously investing regardless of market price. So, no where did I say to avoid entering the market.   However, if you DCA and actively watch your investments you can take advantage of significant opportunities.  IMO as opposed to blindly throwing everything you got in without taking anything into account.

I don't follow what strategy you're advocating.  How do you "take advantage of" these opportunities?
Title: Re: $15k, Invest Now or Wait?
Post by: beastykato on August 02, 2016, 01:41:55 PM
With the free cash available from DCAing vs Lump sum. 
Title: Re: $15k, Invest Now or Wait?
Post by: Zoot Allures on August 02, 2016, 04:45:55 PM
With the free cash available from DCAing vs Lump sum.

But don't you also miss out on opportunities if you're holding cash instead of going all in when you can?
Title: Re: $15k, Invest Now or Wait?
Post by: nereo on August 02, 2016, 05:59:55 PM
With the free cash available from DCAing vs Lump sum.

But don't you also miss out on opportunities if you're holding cash instead of going all in when you can?

You certainly can - it's called a "cash drag" on your portfolio, and is roughly equal to (inflation x period you hold cash x amount of cash held)*.  The hope is that by having cash on the sidelines you can take advantage of large dips, and that by buying on those dips returns will outpace the cash drag.

Under certain scenarios and certain time periods this strategy can yield slightly better results, but it requires far more attention and discipline than simply "invest as often as I get paid". 

* if you want to be really fastidious you can calculate the opportunity cost of holding cash as well; basically the amount you would have earned (or lost) during the relevant time period.
Title: Re: $15k, Invest Now or Wait?
Post by: Retire-Canada on December 28, 2016, 11:43:21 AM
I don't think we're in for doom, but I just get the feeling that the DOW is going to sit more around 18000 than 18500 that it's around now.  I know nothing, just seems too high, no particular reason for guesing that.

Am I being silly, and should I just put the money in now, or should I wait to see if it lowers to 18000 or wait for a bad day in the market and put it in the following day?

Dow is now at 19875 and was nearly at 20K. What did you end up doing?
Title: Re: $15k, Invest Now or Wait?
Post by: 2Birds1Stone on December 28, 2016, 11:47:48 AM
I don't think we're in for doom, but I just get the feeling that the DOW is going to sit more around 18000 than 18500 that it's around now.  I know nothing, just seems too high, no particular reason for guesing that.

Am I being silly, and should I just put the money in now, or should I wait to see if it lowers to 18000 or wait for a bad day in the market and put it in the following day?

Dow is now at 19875 and was nearly at 20K. What did you end up doing?

savage lol
Title: Re: $15k, Invest Now or Wait?
Post by: boarder42 on December 28, 2016, 11:54:42 AM
I don't think we're in for doom, but I just get the feeling that the DOW is going to sit more around 18000 than 18500 that it's around now.  I know nothing, just seems too high, no particular reason for guesing that.

Am I being silly, and should I just put the money in now, or should I wait to see if it lowers to 18000 or wait for a bad day in the market and put it in the following day?

Dow is now at 19875 and was nearly at 20K. What did you end up doing?

savage lol

haha i'm intrigued.
Title: Re: $15k, Invest Now or Wait?
Post by: theolympians on January 01, 2017, 05:29:22 PM
What did you do?
Title: Re: $15k, Invest Now or Wait?
Post by: Heckler on January 01, 2017, 06:05:37 PM
Americans and thier "market" are so funny.  Why not diversify globally and buy whatevers low at the time?

5% short term bonds
25% long term bonds
25% US
25% Canada
17% EAFE
3% EM


Right now, I'm working on a plan to buy my long term bonds back up to allocation before March, hopefully without selling my US.  Ironically at a time when there are many "should I sell my bonds?" threads.   Sure!  Sell them to me - cheap.
Title: Re: $15k, Invest Now or Wait?
Post by: boarder42 on January 01, 2017, 07:04:36 PM
Market timing didn't work
Title: Re: $15k, Invest Now or Wait?
Post by: nereo on January 01, 2017, 08:04:05 PM
Americans and thier "market" are so funny.  Why not diversify globally and buy whatevers low at the time?

5% short term bonds
25% long term bonds
25% US
25% Canada
17% EAFE
3% EM


Just curious, why would you put as much money into Canada as the US given the huge difference in their respective economies?  I'd be concerned with having too much invested in a much smaller slice of pie.
Title: Re: $15k, Invest Now or Wait?
Post by: Heckler on January 02, 2017, 06:08:44 PM
So that when the next big US crash comes, I've got lots to rebalance with. 

And because I'll be spending it in $C
Title: Re: $15k, Invest Now or Wait?
Post by: Heckler on January 02, 2017, 10:41:52 PM
Now here's a well diverified portfolio. 

http://www.forbes.com/sites/baldwin/2016/12/26/the-superdiversified-10-fund-portfolio/?utm_source=yahoo&utm_medium=partner&utm_campaign=yahootix&partner=yahootix#58f29b0f23b1
Title: Re: $15k, Invest Now or Wait?
Post by: nereo on January 03, 2017, 07:16:07 AM
So that when the next big US crash comes, I've got lots to rebalance with. 

And because I'll be spending it in $C
Your answers don't make sense to me. First, the currency that you'll be spending in doesn't dictate which sector(s) you can invest in.  A person could spend in pounds sterling nad decide to invest entirely in Chinese companies.

I'm also not sure what you mean that "when the next big US crash comes" you'll have lots to rebalance with.  Say the US markets drop 25% - with your AA the change in your portfolio would be rather minor.  Given historical correlation between US and Canada it seems likely that will drop too.

I'm not saying your strategy is bad - just that I don't understand it and it seems a bit odd to me.
Full disclosure, I'm in Canada and spend primarily in $CAD.
Title: Re: $15k, Invest Now or Wait?
Post by: talltexan on January 03, 2017, 08:29:22 AM
don't a lot of Canadian companies export to the US? I believe the US accounts for 75% of Canadian exports. So stakes in either country are--to a certain degree--bets on the US, anyway.
Title: Re: $15k, Invest Now or Wait?
Post by: nereo on January 03, 2017, 08:38:06 AM
don't a lot of Canadian companies export to the US? I believe the US accounts for 75% of Canadian exports. So stakes in either country are--to a certain degree--bets on the US, anyway.
Yep - that's part and parcel to the comment I made about the two being fairly strongly correlated. 
Also of interest, slightly over half of all profits from the SP500 are now earned overseas, so ironically owning only the SP500 may give you greater international exposure than owning half US and half Canada.
Title: Re: $15k, Invest Now or Wait?
Post by: Car Jack on January 03, 2017, 09:24:52 AM
I'm a firm Jack Bogle investor.  Time IN the market, not timing the market.

I set up little IPS statements.  Right now, it's "Pay son's tuition and all credit card payments.  When bank account accumulates $10k, put $5k into SCHB".

Market timing would be: "Wait for global commodity future comingled arbitrage data to point to a higher future gain acceleration factor, then invest $5k in SCHB"......or some other nonsense that makes one think that their "feeling" about where the market is moving should govern how or when they should invest.  I stopped counting market highs last year when it got to 15 times for the Dow.  If you don't want to invest at a market high, go open an Ally savings account because you'll never invest.