Author Topic: Liquidated from American funds to vanguard. Dollar cost average or lump sum?  (Read 1840 times)

Recliner

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Last week I did a transfer in kind from Edward Jones to vanguard. I had $190k in a taxable account that I had to sell in order to get from American fund to vanguard index funds.  I put the sell order in last Wednesday and the funds just finally entered my money market vanguard fund today. 

From when I sold to now the market has gained over 1%. Should I dump the full $190k back in asap or dollar cost average and maybe add $45k/month for 4 months or longer? I know lump sum is usually better but it's hard to wrap your head around when it's your $190k and you just missed 1% growth in 3 days waiting with the money out of the market.

dandarc

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I'd just dump it all back in today.

I'm a red panda

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Unless you have a crystal ball that can tell what the market will do later, I'd put it all in today.

Yes, it might drop; but you might also miss valuable time in the market if it goes up, and you're holding the cash.

DCA is a good strategy to put in new money, keep buying through the ups and downs, don't hold onto it waiting for a down.  But when you have a lump sum, I don't understand why you would wait to put it in.

Jack

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This is money that was already in the market. The choice is not whether to lump sum an initial investment or dollar-cost average; the choice is whether to take it out and put it back slowly, or leave it in.

The 1% gain during the transfer is really more of a "transaction fee" than anything else.

Retire-Canada

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Last week I did a transfer in kind from Edward Jones to vanguard. I had $190k in a taxable account that I had to sell in order to get from American fund to vanguard index funds.  I put the sell order in last Wednesday and the funds just finally entered my money market vanguard fund today. 

From when I sold to now the market has gained over 1%. Should I dump the full $190k back in asap or dollar cost average and maybe add $45k/month for 4 months or longer? I know lump sum is usually better but it's hard to wrap your head around when it's your $190k and you just missed 1% growth in 3 days waiting with the money out of the market.

I transferred $200K+ plus from my old financial advisor to my Questrade account recently. The day it showed up I bought Vanguard ETFs according to my asset allocation. I have no idea what is going to happen and I don't pretend I do. My only assumption is that the market will generally go up [if not there is no point investing in it] so I might as well get my money in whenever I have some to invest.

Recliner

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Ok, that's what I was expecting just needed a final nudge.  It's not money I'm going to touch anytime soon so a minor 1% blip is nothing. 

Proud Foot

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From when I sold to now the market has gained over 1%. Should I dump the full $190k back in asap or dollar cost average and maybe add $45k/month for 4 months or longer? I know lump sum is usually better but it's hard to wrap your head around when it's your $190k and you just missed 1% growth in 3 days waiting with the money out of the market.

Think of it this way.  You missed 1% growth in 3 days with the money out of the marked during the transfer, how much more will you miss out on by DCA to reinvest that money?