Author Topic: Dropping $40k into a declining market  (Read 7820 times)

specialkayme

  • Bristles
  • ***
  • Posts: 278
  • Location: Mid-South Atlantic
Dropping $40k into a declining market
« on: December 17, 2018, 02:33:55 PM »
A real estate investment should be cashing out soon, and about $40k will be available. I don't have anything else to reinvest in within the next 6 months or so, so was just going to get some VTSAX until I need it next.

But I just keep watching the market drop, and my current unrealized earnings disappear. You always hear: dollar cost average, and continue to buy the market, as long term you'll be fine. Followed by: when everyone else sells, that's the perfect time to buy. But it's not so easy when you're about to toss five figures into a market that dropped 9% in ten days.

What would you do? Put it in the market and roll the dice, or put it under the mattress realizing you'll be missing gains but sleep better at night?

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8185
  • Location: United States
Re: Dropping $40k into a declining market
« Reply #1 on: December 17, 2018, 02:36:31 PM »
Do you actually need this money in 6 months? I wouldn't do it.

If the money is meant to be a long term investment, today's drops are likely to be meaningless in the frame of the next decade or more.

specialkayme

  • Bristles
  • ***
  • Posts: 278
  • Location: Mid-South Atlantic
Re: Dropping $40k into a declining market
« Reply #2 on: December 17, 2018, 02:56:09 PM »
Do you actually need this money in 6 months?

If I find another property to invest in, I will. Otherwise, probably not.

Quite frankly I'm too lazy/busy to find another investment property at the moment. Everything I find is way over priced and/or needs too much work for what I have time to devote. If the housing market bubbles I'd like to be able to move on one or two small rental properties near by. I may not be able to do as much if the market drops another 20% (although it wouldn't be the end of the world either way). But if I stay in cash (or god forbid gold), the market may never really bubble and I'm running a fools errand.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 8179
  • Location: Earth
  • K Thnx Bye
Re: Dropping $40k into a declining market
« Reply #3 on: December 17, 2018, 03:07:54 PM »
You should invest it today, that way when your shares are worth $30k next month someone will console you with "you haven't lost anything till you sell".

PDXTabs

  • Walrus Stache
  • *******
  • Posts: 5160
  • Age: 41
  • Location: Vancouver, WA, USA
Re: Dropping $40k into a declining market
« Reply #4 on: December 17, 2018, 05:34:00 PM »
What would you do?

I would DCA it in over the next 12 months and be happy that I never had to deal with the headache of another real estate investment, but I might be biased.

Telecaster

  • Magnum Stache
  • ******
  • Posts: 3966
  • Location: Seattle, WA
Re: Dropping $40k into a declining market
« Reply #5 on: December 17, 2018, 06:56:29 PM »
I would love to have $40K to invest in the market right now.   BRK in particular is a screaming bargain at the moment.   It is very seldom this cheap. 

dividendman

  • Handlebar Stache
  • *****
  • Posts: 2268
Re: Dropping $40k into a declining market
« Reply #6 on: December 17, 2018, 11:24:08 PM »
I just put 30k in this morning... and now i'm down 2% on that, oh well :)

I like looking at it from this perspective: the market hasn't' been this low in a year (or whatever the interval is)! It's like i'm investing the money last year! Woohoo!

marty998

  • Walrus Stache
  • *******
  • Posts: 7372
  • Location: Sydney, Oz
Re: Dropping $40k into a declining market
« Reply #7 on: December 18, 2018, 12:10:22 AM »
Do you have capital gains taxes to pay on the sale of the property? That portion of the money to be set aside for tax should not be put on market.

AdrianC

  • Handlebar Stache
  • *****
  • Posts: 1221
  • Location: Cincinnati
Re: Dropping $40k into a declining market
« Reply #8 on: December 18, 2018, 05:59:48 AM »
I would love to have $40K to invest in the market right now.   BRK in particular is a screaming bargain at the moment.   It is very seldom this cheap.
Yep. I already have a lot...but tempting.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1764
  • Location: West-by-god-Virginia
Re: Dropping $40k into a declining market
« Reply #9 on: December 18, 2018, 07:20:07 AM »
Any time an investor has cash available that isn't going to be spent in the next year or two and isn't needed for the emergency fund, he/she should invest it according to his/her chosen asset allocation, regardless of what the market is doing.  Anything else is market timing, and no one is successful at that on a consistent basis.

KarefulKactus15

  • Handlebar Stache
  • *****
  • Posts: 1283
  • Location: Southeast
Re: Dropping $40k into a declining market
« Reply #10 on: December 18, 2018, 07:42:23 AM »
I had 80k cash at the start of this year.

I re balanced my stock assets to a more defensive allocation about, idk Septemberish?

Other that that I've just been slipping all this money as a dca over 12 months  with a high amount into blue Chip and bonds with maybe 15% to emerging, international , and small cap.

Haven't really taken a big negative hit yet and with this allocation don't plan to.       If I can just call the absolute bottom.... Lol

specialkayme

  • Bristles
  • ***
  • Posts: 278
  • Location: Mid-South Atlantic
Re: Dropping $40k into a declining market
« Reply #11 on: December 18, 2018, 07:47:33 AM »
Any time an investor has cash available that isn't going to be spent in the next year or two [/U]and isn't needed for the emergency fund, he/she should invest it according to his/her chosen asset allocation, regardless of what the market is doing.  Anything else is market timing, and no one is successful at that on a consistent basis.

I guess that's really the question though, isn't it? If I had no plans to use the funds in the next 5-10 years, I'd put it in the market without question, because any potential losses I'd have would likely be erased over the investment time period. But I don't like the idea of having 100% stock holdings (beyond emergency fund and whatnot), and would like to be able to get back in the real estate market should it bubble some. If it bubbles in 6-12 months, I don't want to be tied up in 100% stocks. But it also makes no sense to keep it in cash in the meantime (and I can't justify the 2% interest on savings accounts as a "good" investment strategy).

Maybe it's a good time to put some of the cash somewhere other than investments. Pay off a (previously ridiculously low interest) car loan, buy a solar panel roof, and invest the balance in VTSAX.

TheHardenedInvestor

  • Stubble
  • **
  • Posts: 114
Re: Dropping $40k into a declining market
« Reply #12 on: December 18, 2018, 08:08:15 AM »
Down payment on a new Porsche 911.

AccidentalMiser

  • Pencil Stache
  • ****
  • Posts: 709
  • Age: 57
  • Location: SE Tenn
Re: Dropping $40k into a declining market
« Reply #13 on: December 18, 2018, 08:37:49 AM »
Any time an investor has cash available that isn't going to be spent in the next year or two and isn't needed for the emergency fund, he/she should invest it according to his/her chosen asset allocation, regardless of what the market is doing.

This. 

KarefulKactus15

  • Handlebar Stache
  • *****
  • Posts: 1283
  • Location: Southeast
Re: Dropping $40k into a declining market
« Reply #14 on: December 18, 2018, 10:08:55 AM »
Is this a good use case for CDs?

Beats losing it to inflation.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 8179
  • Location: Earth
  • K Thnx Bye
Re: Dropping $40k into a declining market
« Reply #15 on: December 18, 2018, 10:32:06 AM »
1 year CD's are paying 2.7%, I Bonds are paying 2.83% and they are interest deferred for Fed, and no state/local taxes.

goosefraba1

  • 5 O'Clock Shadow
  • *
  • Posts: 77
Re: Dropping $40k into a declining market
« Reply #16 on: December 18, 2018, 10:54:34 AM »
My quarterly bonus is in January. Hopefully there is still a discount on VTSAX. However, the bonus isn't deposited until after quarterly reports.


Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1764
  • Location: West-by-god-Virginia
Re: Dropping $40k into a declining market
« Reply #17 on: December 18, 2018, 10:57:30 AM »
Any time an investor has cash available that isn't going to be spent in the next year or two [/U]and isn't needed for the emergency fund, he/she should invest it according to his/her chosen asset allocation, regardless of what the market is doing.  Anything else is market timing, and no one is successful at that on a consistent basis.

I guess that's really the question though, isn't it? If I had no plans to use the funds in the next 5-10 years, I'd put it in the market without question, because any potential losses I'd have would likely be erased over the investment time period. But I don't like the idea of having 100% stock holdings (beyond emergency fund and whatnot), and would like to be able to get back in the real estate market should it bubble some. If it bubbles in 6-12 months, I don't want to be tied up in 100% stocks. But it also makes no sense to keep it in cash in the meantime (and I can't justify the 2% interest on savings accounts as a "good" investment strategy).

Maybe it's a good time to put some of the cash somewhere other than investments. Pay off a (previously ridiculously low interest) car loan, buy a solar panel roof, and invest the balance in VTSAX.

So it sounds like you still need to define your target investment allocation.  I don't invest directly in real estate (although I do get some exposure through a S&P 500 index fund), so I can't really help you with that question.  But if you really think you're going to do something other than stock investments with the money in 6-12 months, a 2-3% return is probably the best you're going to do.  The money that I'm planning to live off of for the next year or so is currently in a money market account earning 2.15%.  That barely keeps up with inflation, but at least it's not tanking along with the stock market.  Could I do a little better than 2.15%?  Maybe, but it's not worth stressing over it.

As a side note, trying to time the real estate market probably isn't any wiser than trying to time the stock market.
« Last Edit: December 18, 2018, 10:59:49 AM by Monkey Uncle »

specialkayme

  • Bristles
  • ***
  • Posts: 278
  • Location: Mid-South Atlantic
Re: Dropping $40k into a declining market
« Reply #18 on: December 18, 2018, 11:14:22 AM »
So it sounds like you still need to define your target investment allocation.

Well, my target investment allocation is to maintain a percentage of my investments in direct real estate holdings. But my target allocation and my real allocation may not match up.

As a side note, trying to time the real estate market probably isn't any wiser than trying to time the stock market.

No doubt. And while it may seem like I'm trying to time the real estate market, I'm actually not. I'm not trying to buy low and sell high. My goal is to buy good rental properties that are close by, and never really sell them. The one that will sell shortly is an abnormality (I went in with another guy a long time ago, much like MMM's first rental deal. It appreciated in value, had a stable tenant, and was going good. The tenant wanted to buy the home, and the other guy wanted to sell. I liked continuing to own the home, but wasn't going to force the other guy to stay in an investment he wanted out of, and buying his equity out would push my target asset allocation too heavily into real estate for me to be comfortable, so I agreed to sell). If I could flip the cash into another home within 30 days that I felt comfortable with, I would. But all the homes within a 20 min drive don't work well for rentals (they are typically renting for 0.5-0.7% of the value of the home per month, and many require a significant upfit investment). Because house prices are inflated at the moment when compared to rental prices, it doesn't make for a good investment, so I won't. When housing prices drop, or rental payments rise (or some of both), the investment makes more sense and buying a rental home will make more investment sense and I'd like to capitalize on it to stay true to my original target investment allocation.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1764
  • Location: West-by-god-Virginia
Re: Dropping $40k into a declining market
« Reply #19 on: December 18, 2018, 02:12:22 PM »
So it sounds like you still need to define your target investment allocation.

Well, my target investment allocation is to maintain a percentage of my investments in direct real estate holdings. But my target allocation and my real allocation may not match up.

As a side note, trying to time the real estate market probably isn't any wiser than trying to time the stock market.

No doubt. And while it may seem like I'm trying to time the real estate market, I'm actually not. I'm not trying to buy low and sell high. My goal is to buy good rental properties that are close by, and never really sell them. The one that will sell shortly is an abnormality (I went in with another guy a long time ago, much like MMM's first rental deal. It appreciated in value, had a stable tenant, and was going good. The tenant wanted to buy the home, and the other guy wanted to sell. I liked continuing to own the home, but wasn't going to force the other guy to stay in an investment he wanted out of, and buying his equity out would push my target asset allocation too heavily into real estate for me to be comfortable, so I agreed to sell). If I could flip the cash into another home within 30 days that I felt comfortable with, I would. But all the homes within a 20 min drive don't work well for rentals (they are typically renting for 0.5-0.7% of the value of the home per month, and many require a significant upfit investment). Because house prices are inflated at the moment when compared to rental prices, it doesn't make for a good investment, so I won't. When housing prices drop, or rental payments rise (or some of both), the investment makes more sense and buying a rental home will make more investment sense and I'd like to capitalize on it to stay true to my original target investment allocation.

Thanks for explaining.  Initially I wasn't clear on exactly what you were trying to do, but that makes sense.  It does still sound a bit like trying to time the real estate market since you are waiting for prices to drop and/or rents to rise.  But if you're investing in individual properties, I guess that's what you have to do.  Sounds like your only option for parking the cash is to put it in the highest yielding money market you can find, or a CD if you don't mind the risk of eating the penalty if you have to withdraw early.  I certainly wouldn't invest it in stocks if you want to be ready to pounce on an opportunity when it comes along.

specialkayme

  • Bristles
  • ***
  • Posts: 278
  • Location: Mid-South Atlantic
Re: Dropping $40k into a declining market
« Reply #20 on: December 18, 2018, 02:26:51 PM »
It does still sound a bit like trying to time the real estate market since you are waiting for prices to drop and/or rents to rise.

I see how it can look like that, but I'm actually not waiting for housing prices to drop or for rental prices to rise. I'm actually just looking for a rental investment that makes sense. In order to have a rental property that makes sense, the rent needs to be able to cover the mortgage (P&I, calculated at 100% borrowed for purchase price plus upfit even though it won't be), expenses (taxes/insurance/basic repairs), and put a hundred dollars or so in my pocket (for the time of dealing with it all on a monthly basis). Generally speaking, depending on the age of the house and everything, that usually amounts to getting 1% of the value of the home in monthly rent. More is better. Less you're losing money.

Now that 1% is across the board. It doesn't matter if the home is worth $60k or $600k. It also doesn't matter if the housing market increases 10% per year, or drops 5% per year. It's 1% of the value of the home at the time you buy it.

Right now I can't find those deals. They don't exist. At least not locally. I know many landlords in the area that are "compromising" by taking rents at 0.5% of the value. They're probably losing money on that deal, but they're hoping the ownership of multiple homes will bridge their loss, and the increased value of the home over time will make it worthwhile. That's a big gamble to make, at least in my opinion.

So I'm waiting to find the deal. The deal may come because house prices drop as a result of a bubble. If I buy then, I'm not buying because of the bubble, I'm buying because the rent return justifies the investment when before it didn't. Or the deal may come because rent prices increase. If I buy then, I'm not buying because rent prices are increasing, I'm buying because the rent return justifies the investment when before it didn't. Or maybe house prices and rent prices don't actually change, but instead those that are buying up all those properties before they hit the market currently will become saturated, and I have the opportunity to move. Same applies.

Some may call that trying to time the market. But to me it has nothing to do with timing. It has everything to do with investment returns.

Sounds like your only option for parking the cash is to put it in the highest yielding money market you can find, or a CD if you don't mind the risk of eating the penalty if you have to withdraw early.  I certainly wouldn't invest it in stocks if you want to be ready to pounce on an opportunity when it comes along.

Yeah, probably. Only holding that much money in a money market or CD is definitely not in line with my target investment strategy. Although it may be the best option I have at the moment.

John Galt incarnate!

  • Handlebar Stache
  • *****
  • Posts: 2038
  • Location: On Cloud Nine
Re: Dropping $40k into a declining market
« Reply #21 on: December 18, 2018, 04:17:08 PM »
PDXTabs  posted:

I would DCA it in over the next 12 months and be happy that I never had to deal with the headache of another real estate investment, but I might be biased.
[/quote]

Years ago a real estate agent  encouraged me to invest in real estate.

I said to him: "Do you think I am a masochist?"
« Last Edit: December 18, 2018, 04:23:50 PM by John Galt incarnate! »

HBFIRE

  • Handlebar Stache
  • *****
  • Posts: 1311
  • Age: 46
  • Location: Huntington Beach, CA
Re: Dropping $40k into a declining market
« Reply #22 on: December 18, 2018, 10:11:49 PM »
If you will possibly need the funds in the short term (less than 2 years), I wouldn't buy equities.

Open up a couple of heritage checking accounts (25 K max, hence open up 2), pays 3.3%.  This is where I keep my 1 year living costs.
« Last Edit: December 18, 2018, 10:14:03 PM by dustinst22 »

JLee

  • Walrus Stache
  • *******
  • Posts: 7630
Re: Dropping $40k into a declining market
« Reply #23 on: December 19, 2018, 03:35:48 AM »
I sold my house in August and put $75k in the market. Perhaps not the best timing, but it's a lot better than waiting until some arbitrary time when I feel it's better :P

I am sticking to the "invest money as soon as it's available" mindset. Time in the market beats timing, blah blah.

soccerluvof4

  • Walrus Stache
  • *******
  • Posts: 7169
  • Location: Artic Midwest
  • Retired at 50
    • My Journal
Re: Dropping $40k into a declining market
« Reply #24 on: December 21, 2018, 12:47:02 PM »
I too would DCA it in over the next 6-12 months.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 8179
  • Location: Earth
  • K Thnx Bye
Re: Dropping $40k into a declining market
« Reply #25 on: December 21, 2018, 06:14:43 PM »
You should invest it today, that way when your shares are worth $30k next month someone will console you with "you haven't lost anything till you sell".

We're almost there!

elaine amj

  • CM*TO 2024 Attendees
  • Walrus Stache
  • *
  • Posts: 5548
  • Location: Ontario
Re: Dropping $40k into a declining market
« Reply #26 on: December 21, 2018, 07:25:54 PM »
We have $50k currently available from liquidating some other investments too. I spent some time talking about it to DH tonight because he was thinking of waiting for the market to drop a little bit more. Then I pointed out that even if we're only buying halfway on the downslide, we're still getting a sale price. Sure we might miss the really good bargains in another little while if the market continues to drop, but our money starts earning money faster. And since this is a long term investment, we should be just fine buying and holding.

Stray thought - I'm FIREd so will likely have to withdraw some investments in a couple of years for living expenses. I'm thinking in 2 years we will likely have to withdraw $50-60k. Does dumping the money into stocks right now still make sense?

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 8179
  • Location: Earth
  • K Thnx Bye
Re: Dropping $40k into a declining market
« Reply #27 on: December 21, 2018, 07:35:57 PM »
@elaine amj, no one can say yes or no. Money you need in the next <5 years, should NOT be invested in equities.

HBFIRE

  • Handlebar Stache
  • *****
  • Posts: 1311
  • Age: 46
  • Location: Huntington Beach, CA
Re: Dropping $40k into a declining market
« Reply #28 on: December 21, 2018, 08:09:32 PM »
The good news is with rates rising there are some great places to keep short term funds.

elaine amj

  • CM*TO 2024 Attendees
  • Walrus Stache
  • *
  • Posts: 5548
  • Location: Ontario
Re: Dropping $40k into a declining market
« Reply #29 on: December 21, 2018, 08:13:04 PM »
@elaine amj, no one can say yes or no. Money you need in the next &lt;5 years, should NOT be invested in equities.
But wouldn't it be rather crazy to keep FIVE years of living expenses in liquid investments?

Wait a second, u said equities. Like many others we have an asset allocation of various stocks and bonds. So naturally we would be liquidating a mix of stocks and bonds every year.

Sent from my LG-K373 using Tapatalk


TheHardenedInvestor

  • Stubble
  • **
  • Posts: 114
Re: Dropping $40k into a declining market
« Reply #30 on: December 21, 2018, 08:41:29 PM »
We have $50k currently available from liquidating some other investments too. I spent some time talking about it to DH tonight because he was thinking of waiting for the market to drop a little bit more. Then I pointed out that even if we're only buying halfway on the downslide, we're still getting a sale price. Sure we might miss the really good bargains in another little while if the market continues to drop, but our money starts earning money faster. And since this is a long term investment, we should be just fine buying and holding.

Stray thought - I'm FIREd so will likely have to withdraw some investments in a couple of years for living expenses. I'm thinking in 2 years we will likely have to withdraw $50-60k. Does dumping the money into stocks right now still make sense?

First off, how does your money start earning money faster by being in the market longer? The only passive reward you get is dividends, which is about 2% on an S&amp;P 500 index fund, or about the same you could earn in a high yield online savings account or a CD.

Unless the market goes up, being in the market “longer” isn’t going to do anything magical. If you had dumped your 50k in the market in May of 2017 you would have the same amount today, plus the dividends you would have received. So just being in the market longer isn’t really a guarantee of anything.

Is the market going to keep dropping or go up? I don’t know, but just understand that getting your money in as fast as possible because you heard that, “time in the market is better than timing the market”  isn’t some magical thing. Q4 dividends have already been paid out on most index funds for the year so it’s 3 more months before those hit again. At this point, the only thing you got really is the price you pay. Now it’s up to you to decide the day you buy. 2 years a bit of a short time frame for needing the money. Keep in mind most would advise a fixed account for that short of a time frame. Balls in your court.

elaine amj

  • CM*TO 2024 Attendees
  • Walrus Stache
  • *
  • Posts: 5548
  • Location: Ontario
Re: Dropping $40k into a declining market
« Reply #31 on: December 21, 2018, 10:14:40 PM »
Is the market going to keep dropping or go up? I don’t know, but just understand that getting your money in as fast as possible because you heard that, “time in the market is better than timing the market”  isn’t some magical thing. Q4 dividends have already been paid out on most index funds for the year so it’s 3 more months before those hit again. At this point, the only thing you got really is the price you pay. Now it’s up to you to decide the day you buy. 2 years a bit of a short time frame for needing the money. Keep in mind most would advise a fixed account for that short of a time frame. Balls in your court.

Thanks! A lot of food of thought. Still a lot to learn about investments.

roboskier

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: Dropping $40k into a declining market
« Reply #32 on: January 03, 2019, 11:47:39 PM »
Lurker for a couple months. Really appreciate all the advice and level headed comments around here.

Have a move coming up in several months, and began setting aside a descent chunk of change for a down payment over the last 6 months assuming I would buy a house in this "cheaper!" new location. This was before I found sites like this and started really reading seriously about it. Renting is easily a better deal, which I will therefore continue to do.

Accordingly, similar to OP I'm now sitting on this cash in a money market fund and know what I should do... dump it all into VTSAX tomorrow. Having said that, doesn't make it any easier to follow through with in real life with the current market. Perhaps ironically, I continue to max out the 401k and IRA buying cheap index funds, in addition to automatic purchases of VTSAX in a Vanguard brokerage account going for a while, which doesn't affect me in the slightest. Other than to be excited about some cheaper shares.

Not necessarily looking for advice, although maybe I could use a kick in the ass. Just commenting on how it can be funny how much harder it is to actually pull the trigger with a descent amount of money (to me at least) in real life than toss around what's become a cliche here (even if it's correct!).

JLee

  • Walrus Stache
  • *******
  • Posts: 7630
Re: Dropping $40k into a declining market
« Reply #33 on: January 04, 2019, 12:37:56 PM »
Lurker for a couple months. Really appreciate all the advice and level headed comments around here.

Have a move coming up in several months, and began setting aside a descent chunk of change for a down payment over the last 6 months assuming I would buy a house in this "cheaper!" new location. This was before I found sites like this and started really reading seriously about it. Renting is easily a better deal, which I will therefore continue to do.

Accordingly, similar to OP I'm now sitting on this cash in a money market fund and know what I should do... dump it all into VTSAX tomorrow. Having said that, doesn't make it any easier to follow through with in real life with the current market. Perhaps ironically, I continue to max out the 401k and IRA buying cheap index funds, in addition to automatic purchases of VTSAX in a Vanguard brokerage account going for a while, which doesn't affect me in the slightest. Other than to be excited about some cheaper shares.

Not necessarily looking for advice, although maybe I could use a kick in the ass. Just commenting on how it can be funny how much harder it is to actually pull the trigger with a descent amount of money (to me at least) in real life than toss around what's become a cliche here (even if it's correct!).

I put $75k in the market when I sold my house in August, which ended up being damn near market peak.  I maxed my IRA on Jan 1st this year, then the Dow dropped hundreds of points on the 3rd.  Then today it's up 800 points.  Whatever happens happens -- statistically, time in the market beats anything else.

Read this: https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Hopefully that helps :)

roboskier

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: Dropping $40k into a declining market
« Reply #34 on: January 06, 2019, 06:03:16 PM »

I put $75k in the market when I sold my house in August, which ended up being damn near market peak.  I maxed my IRA on Jan 1st this year, then the Dow dropped hundreds of points on the 3rd.  Then today it's up 800 points.  Whatever happens happens -- statistically, time in the market beats anything else.

Read this: https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Hopefully that helps :)

Hey JLee - Thanks, I'd read something similar to that a while ago, good advice. Perhaps it's another form of market timing, but I decided to DCA it over the next 12 months. 3/4 times I'll pay a premium to do this, but the price is worth it to me to remove the worst outcomes.