I'm 48 and have another 8 years until I retire and will have a federal pension. I have about 200K cash and another 172K I have in a TSP tax differed G bond fund. I also have about 50K in tax differed accounts in Vanguard Total Stock Market. I also have a condo worth about 475K and it has a 267K loan. I realize I have way to much cash and this needs to be invested.
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Any thoughts?
..... are really loss averse. If that label describes you, I would say to DCA into stocks and not necessarily go with a really high percentage. You want to have a level of stock exposure that you can stick with if/when the market goes down 50%... and, I would argue, some cash at that point to scoop up lower priced shares.
Also, if stocks were a good investment six weeks ago, they are still a good investment now. At age 48 you could be around another 40-50 years so that is the time frame you are trying to set yourself up for.
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I was invested with my TSP acocunt and got out right when the market starting going down in 2008. I lost about 2K only as I timed the market pretty good mostly by fear. I was thinking about getting back in near the bottom but ultimately fear stopped me from acting. Then I saw it going up but was hoping it would go back down and finally I did go back in after missing out on much of the gains.
The 200K is actually from a inheritance and much of it is from over a year ago and luckily the market hasn't done so well during this time so my 1% account wasn't so bad. I finally got a great opportunity to get back in recently but I kept reading it was going down further and I didn't want to lose principal. I'm worried now that the Fed has taken away the free money and the markets will reverse. Now I see I am making the same errors again.
I like the JlCollins stock series and this makes sense to me so I think I will aggressively start moving into the market. As he says the market always goes up and I need to have the discipline to let it ride. I have a Vanguard account as well as a Capitol One account. I appreciate all the advice and will continue to read.
Based on your past behavior/fears (which are still current-- see bold/italic), I agree that some very minimal amount of stocks (20% ?) to start with is best and DCA in from there. The underlined part is in great contrast to previously, and sounds great, but can you avoid " aggressively start moving OUT of the market".
Just because you've read something on the internet will not automatically help you sleep at night when the market tanks.
I'm at 90+% stocks, but I've proven to myself that I won't panic and sell or "re-write my Investment plan" - same thing.
2002 - 30% down after 1st stock input.
2007-2009 50% down of much greater number
2012 dip worried, but no functional change
2014 Oct, fast dip nearly missed it in the news
2015 summer, bought a bit on the dip 5K in
2016 Feb, almost pulled the big trigger to buy stocks, but missed it (only 5K in)
All that and I still worry/watch my accounts too much.
PS stocks don't always go up in 10-15 year spans.