Good time to invest in VTSAX?

[Samwise]

Hi all,

Curious to hear people's thoughts on here about if it would be wise to invest now.  I've been reading MMM and some related investment stuff for a few months now and I'm finally ready to put some money into VTSAX.  From MMM and related FI books and podcasts, I've heard two different things:

1) Don't try to time the market
2) The market has been inflated for a while.  Wait for stocks to go "on sale" and then buy in

I'm wondering if people think this is a good time to buy VTSAX or are P/E ratios still too high, and things will be expected to go down more?  I'd appreciate to hear people's thoughts!

Thanks,
Sam

[Freedomin5]

The answer is Yes. Put money in now and don’t try to time the market. If prices drop, put more money in. If you’re worried about the market being inflated, use dollar cost averaging, though that is mostly for your own psychological comfort.

Basically, we follow our investment plan and don’t care much where the market is at. But, if the market dips, then we are scrounging for pennies between our sofa cushions so we can buy even more at that time.

[PoutineLover]

"The best time to invest was 20 years ago. The second best time is now."
-chinese proverb
If you are investing for the long term, it doesn't matter what the stock market does today. The biggest gains come after the biggest drops, and if people could actually know when you hit bottom so they could invest right before it goes up, they'd be billionaires. If you have a lot of money to invest and you're scared, split it up into manageable chunks and invest it weekly, or monthly, or whatever makes you sleep better. And before you start, write an investment policy statement that you can reference if the market gyrations are making you queasy. As long as you have a clear goal and an asset allocation that fits your risk tolerance, you don't need to worry about what the market does each day.

[RWD]

Yes, don't try to time the market. If you're just getting started the amounts you're investing now will seem insignificant compared to your portfolio in a decade or two. The inertia of investing will help you much more in the long run than whether you started when the market was "on sale".

[Boofinator]

A great place to start investing is by using tax-advantaged accounts (assuming you aren't maxing them out already). Not sure of your specifics (feel free to share), but investments in a tax-deferred account are essentially discounted by your combined income tax rates. So if you are at a combined income tax rate of 25%, you can think of any investments you make there as being on sale, 25% off.

[trollwithamustache]

When isn't it a good time to invest in VTSAX?

[terran]

On average the markets go up, so on average you will do better the sooner you invest. Anyone who tells you different is telling you to try to time the market. Lots of people try and lots of people fail. If you're asking the question you're definitely one who will fail. Those who maybe succeed make lots of money investing for other people and charge large fees to do so which almost always cost more than the advantage they're able to gain so on net their clients end up doing worse. Long story short: invest early and often, invest in index funds, ignore the markets until you're nearing retirement (or at least only watch them for sport if you're strong willed enough not to try to time them).

[soccerluvof4]

The answer is Yes. Put money in now and don’t try to time the market. If prices drop, put more money in. If you’re worried about the market being inflated, use dollar cost averaging, though that is mostly for your own psychological comfort.

Basically, we follow our investment plan and don’t care much where the market is at. But, if the market dips, then we are scrounging for pennies between our sofa cushions so we can buy even more at that time.

This ^+1 

[Samwise]

Thanks all, I just made my first ever investment in the stock market -- in VTSAX.  Thanks for the boost of encouragement all :-)

[frugledoc]

Thanks all, I just made my first ever investment in the stock market -- in VTSAX.  Thanks for the boost of encouragement all :-)

Good job. Now hope that the market goes down for the next few years so you can accumulate more for cheaper

[robartsd]

Stocks have been on sale for two months. About 5-10% below the late September high. Unfortunately I've done most of my buying on days that were closer to 5% off than 10% off.

[jc4]

To be fair. For your question, this is a very biased site. The overwhelming, common perspective here is BUY NOW, DON'T time. You won't get a perspective from the contrarian side asking here.

Nevertheless, I do agree with the DON'T time perspective, because I find it's based on math.

I'd VERY HIGHLY RECCOMEND checking out indexview. Set it at 1880-1900 and slowly scroll right. Watch what happens to the peaks/valleys over time.

http://www.mrmoneymustache.com/2014/08/25/indexview/

[DS]

Stocks have been "on sale" since they were created ;)



You will see a common theme. "I know I shouldn't time the market, but should I time the market?":

https://forum.mrmoneymustache.com/investor-alley/rolling-over-into-vanguard-timing-current-pe-ratios/

https://forum.mrmoneymustache.com/investor-alley/is-it-possible-the-market-has-peaked/

https://forum.mrmoneymustache.com/investor-alley/i-cant-see-the-recession-yet-pass-me-the-glasses-recession-in-2-years/

https://forum.mrmoneymustache.com/investor-alley/buying-in-market-dips-today!/

[2Birds1Stone]

Sure, you can buy VTSAX for $67 now......I can guarantee that it will only go up or down from there!

[jc4]

I checked IndexView for you. It'd be nice to hit the bottom, but even if you only bought at peaks you'd be in great shape now.

[pecunia]

jc4:

I'm glad you posted that.  I saw the 3 percent drop today and was getting rather morose thoughts about this whole investing stock market thing.  I had the thoughts that why didn't I just buy toys with the money.  Then i saw the chart and realized that my thinking was lizard brain and short term.

Thanks

[terran]

jc4:

I'm glad you posted that.  I saw the 3 percent drop today and was getting rather morose thoughts about this whole investing stock market thing.  I had the thoughts that why didn't I just buy toys with the money.  Then i saw the chart and realized that my thinking was lizard brain and short term.

Thanks

The markets were closed today in honor of George H.W. Bush. You saw the markets dropped 3% yesterday :-)

[Radagast]

jc4:

I'm glad you posted that.  I saw the 3 percent drop today and was getting rather morose thoughts about this whole investing stock market thing.  I had the thoughts that why didn't I just buy toys with the money.  Then i saw the chart and realized that my thinking was lizard brain and short term.

Thanks

I realized that I really like it when it goes down. I don’t have the slightest clue when or where markets are going, but I will keep on putting money in until I have enough wherever that ends up being. I know with certainty that with hindsight I will see I made the most money on days when the market was down, in direct proportion to the degree of downness and the largest amount of time in the past resulting in collecting the most dividends in between. So while I am opinionless on where it is heading I do know that wherever that is, lower will turn out to be better in the meantime. It seems like an obvious platitude but the feeling I got when I realized was kinda profound. Whatever the price ends up at on what ever day I have enough, the lowest prices will turn out to have been best!