Author Topic: Lump Sum to Invest  (Read 4473 times)

marquiri

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Lump Sum to Invest
« on: March 03, 2015, 12:59:39 PM »
Good afternoon everyone. I am looking for some feedback on investing a lump sum. I will soon be receiving approximately $100,000.00, which I want to invest. As background, I'm 35 years old and I do not have any debt. I have to dump it somewhere, but I have concerns about the ability of the market to continue its ascent. I guess you could call me a skeptic. This just feels like a very bad time to be buying in, even though it will be a long term investment. I would really appreciate your thoughts.

Rich

seattlecyclone

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Re: Lump Sum to Invest
« Reply #1 on: March 03, 2015, 01:26:20 PM »
Don't time the market. Invest it all. The market is usually at an all-time high, yet it keeps going up in the long term. Though it's certainly possible that the market will crash the day after you invest, you have to play the odds, and the odds are that the market will go up in any given month/quarter/decade/etc.

samuck

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Re: Lump Sum to Invest
« Reply #2 on: March 03, 2015, 01:30:15 PM »
I would invest 50% now and 50% over the next 1.5 years in monthly intervals.

GGNoob

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Re: Lump Sum to Invest
« Reply #3 on: March 03, 2015, 01:44:44 PM »
About 2/3 of the time you are better off investing the lump sum. Just do it.

If you aren't already maxing retirement accounts, you could live off of some of this money while contributing the max to your 401k or other work retirement plans. Then max your IRA, max an HSA if you have or can have one, and put the rest in a taxable account.

James

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Re: Lump Sum to Invest
« Reply #4 on: March 03, 2015, 01:54:27 PM »
No reason not to use dollar cost averaging if you have concerns, you could slowly put the money in over the next 6 months, or 3 months, or year. Just put it in at set intervals regardless of the market level.
http://en.wikipedia.org/wiki/Dollar_cost_averaging

Having said that, I would just put it all in, and if anything just spread out half of it over the next 6 months.

Kaspian

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Re: Lump Sum to Invest
« Reply #5 on: March 03, 2015, 01:54:51 PM »
This topic has been discussed fairly thoroughly this week:

http://forum.mrmoneymustache.com/investor-alley/need-some-mmm-insight/

RichMoose

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Re: Lump Sum to Invest
« Reply #6 on: March 03, 2015, 07:29:47 PM »
Good afternoon everyone. I am looking for some feedback on investing a lump sum. I will soon be receiving approximately $100,000.00, which I want to invest. As background, I'm 35 years old and I do not have any debt. I have to dump it somewhere, but I have concerns about the ability of the market to continue its ascent. I guess you could call me a skeptic. This just feels like a very bad time to be buying in, even though it will be a long term investment. I would really appreciate your thoughts.

Rich
Buy oil rig companies, they're cheap right now.


j/k... Invest with an index fund and go all in right now. For psychological support read the www.jlcollinsnh.com Stock Series from start to finish.

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Re: Lump Sum to Invest
« Reply #7 on: March 03, 2015, 10:02:33 PM »
... I will soon be receiving approximately $100,000.00, which I want to invest...I have to dump it somewhere, but I have concerns about the ability of the market to continue its ascent. I guess you could call me a skeptic. This just feels like a very bad time to be buying in, even though it will be a long term investment...


$100,000 is enough to allow you to consider investments outside the stock market.  Like rental properties.  Like starting a side business.  Whatever you do, don't rush into it.  You DON'T "have to dump it somewhere."  It's not a bag of apples that's going to spoil on you.  Give yourself whatever time you need to feel confident in your eventual decision.

Good luck.

surfhb

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Re: Lump Sum to Invest
« Reply #8 on: March 03, 2015, 10:07:47 PM »
Good afternoon everyone. I am looking for some feedback on investing a lump sum. I will soon be receiving approximately $100,000.00, which I want to invest. As background, I'm 35 years old and I do not have any debt. I have to dump it somewhere, but I have concerns about the ability of the market to continue its ascent. I guess you could call me a skeptic. This just feels like a very bad time to be buying in, even though it will be a long term investment. I would really appreciate your thoughts.

Rich

You cant think short term when investing.    Ask yourself:  Where do you believe the S&P index will be in 50 years  (about the same time frame you will be on this Earth)?

But , there's a little info missing.   Whats your income?   How much do you currently have saved?    What do you do?    Do you have an Emergency fund set up?    Goals?   Married?   Kids?
« Last Edit: March 03, 2015, 10:11:08 PM by surfhb »

zurich78

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Re: Lump Sum to Invest
« Reply #9 on: March 04, 2015, 07:59:54 AM »
Dollar cost average.

If you're really worried about the market's ability to ascend, then put in like 8% of your funds every month for the next 12 months.

rmendpara

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Re: Lump Sum to Invest
« Reply #10 on: March 04, 2015, 12:10:37 PM »
1) History suggests you are most likely better off by investing as soon as possible. No guarantees this time, or any time.

2) Second option is unlikely to beat #1 (as suggested by many who have studied this exact question historically), however, it may help put your fears at ease. Invest 5k/month until it's all out there... or some other amount. If the market tanks, and you feel alright about it, then you can accelerate the purchases. If the market goes up, then you should feel stupid about not doing #1, and can learn your lesson.

DK

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Re: Lump Sum to Invest
« Reply #11 on: March 04, 2015, 01:02:47 PM »
I had roughly the same amount about a year ago. I waited thinking it was high then. All I did was end up losing out on gains throughout the year. Not to say it can't drop, but as long as you are planning on having it in 5+ years, might as well put it all in rather than try to time the market.