Author Topic: Wait a minute.. I was about to put in max for roth ira tonight UNTIL  (Read 12002 times)

Emergo

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My coworker told me we're headed to a recession and for me not to put in any money in stocks.

What do you guys know about this? He says China just went down after 20 minutes. Not sure i know what he means but it sounds scary.

Should i still proceed with maxing my roth along with funding my taxable accounts this year? Thanks.

Mr. Green

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #1 on: January 07, 2016, 04:05:53 PM »
There will always be ups and downs. Right now all the selling it out of fear, not technical data. If I were you I'd look at it as a good buying opportunity, which I do! Just made our $5500 yearly allocation to my wife's IRA today.

trailrated

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #2 on: January 07, 2016, 04:20:13 PM »
I predict the market will go up or down tomorrow! Who knows? Keep investing.

Frankies Girl

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #3 on: January 07, 2016, 04:27:49 PM »
The best time to buy is when the market is down... it means stocks are on sale. Even if we are heading into a recession (and no one knows that - there are no genuine psychics after all), you are still better off investing and leaving your money in the market to grow.

Time in the market is always better than trying to time the market.

fattest_foot

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #4 on: January 07, 2016, 04:30:51 PM »
If your coworker is so sure about it, he should start shorting the market and retire next week.

But he has no idea. He's guessing, just like everyone else.

woopwoop

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #5 on: January 07, 2016, 04:32:34 PM »
I predict the market will go up or down tomorrow! Who knows? Keep investing.
+1, except I also predict that it might just stay the same. Keep investing!

Frankies Girl

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #6 on: January 07, 2016, 04:35:50 PM »
And it also sounds like you've never read Jim Collins' stock series: http://jlcollinsnh.com/stock-series/

It will help with that pesky "my co-worker/hairdresser/brother-in-law said something scary/crazy about the stock market so should I panic" syndrome. :)


BarkyardBQ

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #7 on: January 07, 2016, 04:37:35 PM »
You should wait until stocks get more expensive then buy so you'll get less growth over time!

We funded to IRA's on Monday, and got discounts with DW's contributions yesterday, and I'm hoping for even better discounts tomorrow.
« Last Edit: January 07, 2016, 04:39:33 PM by BackyarBQ »

matchewed

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #8 on: January 07, 2016, 04:40:32 PM »
Should i still proceed with maxing my roth along with funding my taxable accounts this year? Thanks.


arebelspy

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #9 on: January 07, 2016, 04:42:14 PM »
Aside from what everyone else mentioned, just because you put money in your Roth doesn't mean it's invested in anything.

It can be in cash in your Roth.

Everyone is saying to not try and time the market, which I agree with, but also... the market crashing, and you wanting to invest in it or not, is irrelevant to funding your Roth, because you don't need to be invested within your Roth, you can just put the money in.
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Kaspian

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #10 on: January 07, 2016, 11:52:22 PM »
My coworker told me we're headed to a recession and for me not to put in any money in stocks.

Does your co-woker have a seven-figure portfolio or a degree in international economics?  If not, please ignore this person.

arebelspy

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #11 on: January 08, 2016, 12:31:12 AM »
My coworker told me we're headed to a recession and for me not to put in any money in stocks.

Does your co-woker have a seven-figure portfolio or a degree in international economics?  If not, please ignore this person.

Even if they had both, I'd be ignoring them.  Plenty of smart people are wrong all the time.  None, as far as I know, have a working crystal ball.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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Bateaux

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #12 on: January 08, 2016, 01:13:50 AM »
Dollar cost averaging is the easiest way to spread out the worry.   You buy alll the way down and all the way back up.

ShoulderThingThatGoesUp

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #13 on: January 08, 2016, 05:24:26 AM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.

FIRE_Buckeye

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #14 on: January 08, 2016, 08:39:58 PM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Zamboni

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #15 on: January 08, 2016, 08:53:10 PM »
I won't make any predictions other than that a 27-year-old who invests now regularly will end up with more money in a decade (or two or three) than a 27-year-old who decides to try to time the market and sit on cash regularly instead.

bacchi

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #16 on: January 08, 2016, 09:38:06 PM »
Here come the doom-and-gloomers...

I think I'll create another username.

Username #1: I'll predict that the markets will recover.

Username #2: I'll predict that we'll go into a recession.


arebelspy

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #17 on: January 08, 2016, 11:52:13 PM »
I won't make any predictions other than that a 27-year-old who invests now regularly will end up with more money in a decade (or two or three) than a 27-year-old who decides to try to time the market and sit on cash regularly instead.

Well said.  I agree with that prediction.
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Zoot Allures

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #18 on: January 09, 2016, 12:13:13 AM »
My stash has lost $10K over the past week, and this has taught me a few important things:

1. I must have accumulated a decent chunk of change for that to happen!

2. I am unfazed by these "losses" and would be happy to see a significant correction happen, though I recognize it will cause suffering for some.

3. Had I not discovered MMM and JLCollinsNH, I probably wouldn't have achieved point #1 yet and might never have learned to have the perspective in point #2.
« Last Edit: January 09, 2016, 12:14:52 AM by Zoot Allures »

FIRE47

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #19 on: January 09, 2016, 06:05:12 AM »
I did jan 4 with my Tfsa I assume it's something like a Roth here in Canada. Ouch. My Stache has only started to really grow the last year or two cant say the markets have done me any favours. im hoping since my international and Canadian portions are basically in a bear market and even my us are almost in a correction that that bodes well for the future returns. 

Heckler

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #20 on: January 09, 2016, 07:38:14 AM »
My stash has lost $10K over the past week, and this has taught me a few important things:

1. I must have accumulated a decent chunk of change for that to happen!

2. I am unfazed by these "losses" and would be happy to see a significant correction happen, though I recognize it will cause suffering for some.

3. Had I not discovered MMM, Canadian Couch Potato and Bogleheads, I probably wouldn't have achieved point #1 yet and might never have learned to have the perspective in point #2.


Am I looking in a mirror?

Emergo

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #21 on: January 09, 2016, 12:08:50 PM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Fund it but don't invest it?  What does this mean?

FIRE_Buckeye

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #22 on: January 09, 2016, 12:35:47 PM »
Fund it but don't invest it?  What does this mean?
Funding is simply the transfer of cash from your bank account (or wherever) to your Roth account.
They'll allocate it to a money market fund until you decide to actually invest it.

sol

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #23 on: January 09, 2016, 12:46:03 PM »
any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions.

Because the market is short term down?  Doesn't that make the market more attractive at today's prices than it was last week?

I fail to see the logic behind your suggestion that buying at a lower P/E today is somehow a worse idea than buying at a higher P/E then.  You're buying the same assets this week that you would have bought last week, with all of the same accompanying revenue streams and dividends, but now your'e getting them at a reduced price.  If you were buying in December, you should definitely be buying in January.

FIRE_Buckeye

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #24 on: January 09, 2016, 01:29:38 PM »
I fail to see the logic behind your suggestion that buying at a lower P/E today is somehow a worse idea than buying at a higher P/E then.  You're buying the same assets this week that you would have bought last week, with all of the same accompanying revenue streams and dividends, but now your'e getting them at a reduced price.  If you were buying in December, you should definitely be buying in January.
Where did I say anything about December? Or about not buying at all?
I was referring specifically to the OP's question about fully funding his Roth, that be, putting a big lump-sum into the market right now. Is now a better time to buy than December? Of course it is. That said, look at the historical trends, look at the macroeconomic factors at work right now, look at the charts or any other good indicators you want to use. There are significantly more signs that point to the market going down in the short to intermediate term than there are suggesting it'll go up. Will it do either with absolute certainty? Of course not, that isn't how life works. But I'm perfectly content holding a bit more cash than normal and waiting a bit on things like my Roth and Taxable Account contributions, at the risk of missing a few % in gains if the market makes an unexpected miraculous rebound, to avoid potentially dumping my funds in lump-sum on the eve of another 2000 or 2008 event.

For disclosure, I'm currently DCA'ing through my 401k contributions, and will likely be doing the same with Roth contributions throughout the year assuming the bottom doesn't completely fall out. When it ultimately does, I want to have the dry powder on hand to take advantage.
« Last Edit: January 09, 2016, 01:32:11 PM by FIRE_Buckeye »

arebelspy

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #25 on: January 09, 2016, 02:59:38 PM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Fund it but don't invest it?  What does this mean?

See my first post in this thread.  You can transfer money into your Roth, but not invest it in anything within the Roth.

Think of the Roth like a bank account, you transfer money in. And then within that account, you invest in different things.  Fund the Roth by putting money in, but whether or not you invest it now, or let it sit in cash in there, is up to you.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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Tyler

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #26 on: January 09, 2016, 03:36:09 PM »
See my first post in this thread.  You can transfer money into your Roth, but not invest it in anything within the Roth.

Think of the Roth like a bank account, you transfer money in. And then within that account, you invest in different things.  Fund the Roth by putting money in, but whether or not you invest it now, or let it sit in cash in there, is up to you.

+1.  Very good advice.

Paul der Krake

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #27 on: January 09, 2016, 03:49:57 PM »
Are you referring to your 2015 or 2016 contribution? If the former, at least follow arebelspy's advice and do the cash contribution before April 15. If you don't, you will lose that tax advantaged space... forever *cue dramatic music*


MustacheAndaHalf

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #28 on: January 09, 2016, 04:03:38 PM »
Maybe OP is asking the mechanics of what actually happens.

You have $5,500 in your taxable account, in a money market fund.  You instruct your brokerage to make a contribution to a new Roth IRA account, using the $5,500.  You are allowed, by IRS rules, to make it count towards 2015 right up until April 15.  In that new Roth IRA, you allocate 100% to a money market fund.  So what actually happened?  You took $5,500 in a money market fund, and moved it to another money market fund.  So you don't have to make an asset allocation decision - you can simply benefit from not being taxed on that $5,500 again.

Money market funds currently fall behind inflation (unlike stocks), so don't overlook the silent danger of investing in cash.

Emergo

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #29 on: January 09, 2016, 09:25:20 PM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Fund it but don't invest it?  What does this mean?

See my first post in this thread.  You can transfer money into your Roth, but not invest it in anything within the Roth.

Think of the Roth like a bank account, you transfer money in. And then within that account, you invest in different things.  Fund the Roth by putting money in, but whether or not you invest it now, or let it sit in cash in there, is up to you.

So what are most people doing? Or what would they do in my shoes and why?

Richie

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #30 on: January 09, 2016, 09:40:29 PM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Fund it but don't invest it?  What does this mean?

See my first post in this thread.  You can transfer money into your Roth, but not invest it in anything within the Roth.

Think of the Roth like a bank account, you transfer money in. And then within that account, you invest in different things.  Fund the Roth by putting money in, but whether or not you invest it now, or let it sit in cash in there, is up to you.

So what are most people doing? Or what would they do in my shoes and why?

Most (sensible) people are investing MORE right now.  Think of it this way - the stocks you would normally buy are on sale!  You'll have only to gain.  The stock market scares a lot of people, which is totally unnecessary.  Buy no matter what state it's in.

On a side note, you might want to look into Betterment.  Especially if you're skittish about the market.  It does all the heavy lifting for you.

Emergo

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #31 on: January 09, 2016, 09:44:37 PM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Fund it but don't invest it?  What does this mean?

See my first post in this thread.  You can transfer money into your Roth, but not invest it in anything within the Roth.

Think of the Roth like a bank account, you transfer money in. And then within that account, you invest in different things.  Fund the Roth by putting money in, but whether or not you invest it now, or let it sit in cash in there, is up to you.

So what are most people doing? Or what would they do in my shoes and why?

Most (sensible) people are investing MORE right now.  Think of it this way - the stocks you would normally buy are on sale!  You'll have only to gain.  The stock market scares a lot of people, which is totally unnecessary.  Buy no matter what state it's in.

On a side note, you might want to look into Betterment.  Especially if you're skittish about the market.  It does all the heavy lifting for you.

I thought I read around here and on jcollinsh is just get VTSAX and keep putting money into and it and I'm good. It sounds simple, but is that wrong?

And extra money goes to VTIAX.

Richie

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #32 on: January 09, 2016, 09:49:55 PM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Fund it but don't invest it?  What does this mean?

See my first post in this thread.  You can transfer money into your Roth, but not invest it in anything within the Roth.

Think of the Roth like a bank account, you transfer money in. And then within that account, you invest in different things.  Fund the Roth by putting money in, but whether or not you invest it now, or let it sit in cash in there, is up to you.

So what are most people doing? Or what would they do in my shoes and why?

Most (sensible) people are investing MORE right now.  Think of it this way - the stocks you would normally buy are on sale!  You'll have only to gain.  The stock market scares a lot of people, which is totally unnecessary.  Buy no matter what state it's in.

On a side note, you might want to look into Betterment.  Especially if you're skittish about the market.  It does all the heavy lifting for you.

I thought I read around here and on jcollinsh is just get VTSAX and keep putting money into and it and I'm good. It sounds simple, but is that wrong?

And extra money goes to VTIAX.

Personally, I would not be exclusively in VTSAX.  I like a balance of US, Foreign, and Bonds - which Betterment offers me with little effort on my part.  This is a screen shot of my portfolio through them.


arebelspy

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #33 on: January 10, 2016, 12:19:39 AM »
It won't really matter what day you invested in 2016 when you want the results in 2035. To the extent it does matter, the best anybody can predict is that you're better off doing it sooner rather than later.
True, to a point.
That said, just about any investor (outside of short-term scalpers) would be doing him or herself a disservice by throwing a big chunk into the market right now given market conditions. Biggest weekly loss to open a year, ever. Over 2200 days into the third longest bull market in history (all things that go up, inevitably come crashing down)  If nothing else, fund the Roth as Arebelspy suggested, but wait for the dust to settle a bit before making a strong commitment.

Fund it but don't invest it?  What does this mean?

See my first post in this thread.  You can transfer money into your Roth, but not invest it in anything within the Roth.

Think of the Roth like a bank account, you transfer money in. And then within that account, you invest in different things.  Fund the Roth by putting money in, but whether or not you invest it now, or let it sit in cash in there, is up to you.

So what are most people doing? Or what would they do in my shoes and why?

Invest.  Continue to invest.  Invest more.  Continue to do so for years and years, until you retire.

Money you need to spend in 2035 won't matter when in 2016 it is invested.  Invest what you can, as often as you can, ignoring the market.  And you'll come out very, very rich.

Much more so than someone trying to time the market.

I agree with Jim Collins' advice on pretty much all investing topics.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

AZryan

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #34 on: January 10, 2016, 11:36:19 AM »
Quote from: Richie
Personally, I would not be exclusively in VTSAX.  I like a balance of US, Foreign, and Bonds - which Betterment offers me with little effort on my part.  This is a screen shot of my portfolio through them.

Does your advice really make much sense when you yourself would have more money if you'd actually only been in VTSAX?

Not that I advocate that myself, or reject forms of diversification. It's just that your own example shows ~37% in international, and that's been lousy since the 2008 global recession (vs. the US market).

I mean, do you have any solid argument that shows that fates are likely totally reverse in the next decade or so?

Personally, I still think the US market is still the strongest. Partly because of how greedy and ruthless we are vs. how much better Europe/the World treats its workers and income from top to bottom.
Plus how US corps dominate the rest of the world, so they sort of are international/global really.
And things like how the 4% rule only works with US stocks, but fails if swapped with almost any other nation on Earth in back-testing.

IMO, even if say Europe starts to now do better than the US market, it's more likely than not that the US will still do well.
In back-testing, even having a typical 15-20% allocation of Europe or International stocks, the results are pretty close to identical to having just had all US.

Richie

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #35 on: January 10, 2016, 12:15:33 PM »
Quote from: Richie
Personally, I would not be exclusively in VTSAX.  I like a balance of US, Foreign, and Bonds - which Betterment offers me with little effort on my part.  This is a screen shot of my portfolio through them.

Does your advice really make much sense when you yourself would have more money if you'd actually only been in VTSAX?

Not that I advocate that myself, or reject forms of diversification. It's just that your own example shows ~37% in international, and that's been lousy since the 2008 global recession (vs. the US market).

I mean, do you have any solid argument that shows that fates are likely totally reverse in the next decade or so?

Personally, I still think the US market is still the strongest. Partly because of how greedy and ruthless we are vs. how much better Europe/the World treats its workers and income from top to bottom.
Plus how US corps dominate the rest of the world, so they sort of are international/global really.
And things like how the 4% rule only works with US stocks, but fails if swapped with almost any other nation on Earth in back-testing.

IMO, even if say Europe starts to now do better than the US market, it's more likely than not that the US will still do well.
In back-testing, even having a typical 15-20% allocation of Europe or International stocks, the results are pretty close to identical to having just had all US.

I haven't been investing long enough to have come out ahead with VTSAX.  Mainly because, I was a teenager at the beginning of the stock market acceleration after the recession and had things on my mind other than investments.  I have a 40 year outlook, which is why I'm not exclusively US stocks.  I fear that the manipulation of the market that the Fed has engaged in will backfire eventually, and I don't want to be exclusively US when that happens.  Don't get me wrong, though, VTSAX is a fine index fund to invest in.  It's just that my personal strategy does not align with it.

FIRE47

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #36 on: January 10, 2016, 04:21:31 PM »
Quote from: Richie
Personally, I would not be exclusively in VTSAX.  I like a balance of US, Foreign, and Bonds - which Betterment offers me with little effort on my part.  This is a screen shot of my portfolio through them.

Does your advice really make much sense when you yourself would have more money if you'd actually only been in VTSAX?

Not that I advocate that myself, or reject forms of diversification. It's just that your own example shows ~37% in international, and that's been lousy since the 2008 global recession (vs. the US market).

I mean, do you have any solid argument that shows that fates are likely totally reverse in the next decade or so?

Personally, I still think the US market is still the strongest. Partly because of how greedy and ruthless we are vs. how much better Europe/the World treats its workers and income from top to bottom.
Plus how US corps dominate the rest of the world, so they sort of are international/global really.
And things like how the 4% rule only works with US stocks, but fails if swapped with almost any other nation on Earth in back-testing.

IMO, even if say Europe starts to now do better than the US market, it's more likely than not that the US will still do well.
In back-testing, even having a typical 15-20% allocation of Europe or International stocks, the results are pretty close to identical to having just had all US.

For arguments sake is saying to go 100% equities from one country based on the past few years of performance (albeit 50% or so of the total global market if I'm not mistaken) not straying close to stock picking/market timing for lack of a better term? The last few years of outperformance probably shouldn't lead someone into making long term decisions on how to base their AA or am I missing something? I can possibly see a case for going 100% equities although most of the reading I've done seems to point to 80-90% being the sweet spot of risk adjusted returns.

OvertheRainbow

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #37 on: January 10, 2016, 10:29:28 PM »
My coworker told me we're headed to a recession and for me not to put in any money in stocks.

What do you guys know about this? He says China just went down after 20 minutes. Not sure i know what he means but it sounds scary.

Should i still proceed with maxing my roth along with funding my taxable accounts this year? Thanks.

I had this hesitation too, but I decided to go ahead and max out my Roth. Buy low, sell high...if at all!

Whatever you do, stay in the game!

Scandium

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #38 on: January 11, 2016, 08:28:09 AM »
My coworker told me we're headed to a recession and for me not to put in any money in stocks.

What do you guys know about this? He says China just went down after 20 minutes. Not sure i know what he means but it sounds scary.

Should i still proceed with maxing my roth along with funding my taxable accounts this year? Thanks.

Is this your coworker?


Then I would listen to him. If not, then no.

matchewed

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #39 on: January 11, 2016, 08:31:24 AM »
My coworker told me we're headed to a recession and for me not to put in any money in stocks.

What do you guys know about this? He says China just went down after 20 minutes. Not sure i know what he means but it sounds scary.

Should i still proceed with maxing my roth along with funding my taxable accounts this year? Thanks.

Is this your coworker?


Then I would listen to him. If not, then no.

If I remember that movie it didn't go too well to listen to that guy. ;)

catccc

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #40 on: January 11, 2016, 09:15:30 AM »
I'm an accidental timer.

I had both my Roth and my husband's Roth maxed out for 2015 and invested in our typical allocation of stocks/bonds on, like January 2nd last year.  I do this every year, and I think nearly every year after I contribute there's a dip in the next day or two.  It annoys me, but I don't really care because I know lump sum, the earlier the better, beats other choices.

This year I was ready to fund our IRAs ASAP, as usual.  But I decided we should switch to traditional IRAs.  So that required opening a new account. 

I either missed a step, or Vanguard has some sort of policy about the money first going into a holding fund (money market) of sorts.  I called as soon as I could that same day to find out how to move it.  Easy peasy, just do it online. 

Went to do it online, but then learned that I couldn't invest in Admiral shares because the minimums are based on that individual account, not your investments across vanguard.  Figured I should call back and first do a roll-over that's been hanging out on my to-do list first, then I can invest the 2016 contributions in Admiral shares. 

New traditional IRA still has $5,500 just sitting in the money market.  I have tried calling Vanguard several times since then, and for some reason or another haven't been able to complete the rollover.  (Call went on too long and I had a meeting I had to attend, so I had to cut it off.  Called at 9:30 thinking they closed at 10.  Called on a weekend and they weren't open.  Called and then a kid needed me.)

Since this is taking me so long (we are going on a week now), and prices keep dropping, I'm like "hey, good thing I can't seem to get anything done!  Hmm, maybe I should do that rollover and let the $5,500 sit for a while until it see it coming back just a bitty bit.."  I know market timing is stupid, that's why I do things the way I do.  But I'm suddenly finding it almost irresistible...
« Last Edit: January 13, 2016, 11:28:37 AM by catccc »

Scandium

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #41 on: January 11, 2016, 09:28:48 AM »
My coworker told me we're headed to a recession and for me not to put in any money in stocks.

What do you guys know about this? He says China just went down after 20 minutes. Not sure i know what he means but it sounds scary.

Should i still proceed with maxing my roth along with funding my taxable accounts this year? Thanks.

Is this your coworker?


Then I would listen to him. If not, then no.

If I remember that movie it didn't go too well to listen to that guy. ;)
No. But his stock picks were great. Just be careful with those  logging company investments.

bognish

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #42 on: January 11, 2016, 12:33:16 PM »
Last week I transferred $5500 from my checking account to my Roth IRA. Today the transfer was settled and the amount was available to trade. I purchased a total market stock index fund. In a month or so I will have enough cash to do the same with my wife's 2016 Roth contribution. I follow the same pattern every year. After that I will fund my kids 529 plan up to the state tax deductible limit. Thats my "market timing"/dollar cost averaging approach: max out tax deferred account in this order once the cash is available and don't worry about the market value until either I or my kids are old enough to pull from the accounts without penalty.

forestj

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #43 on: January 11, 2016, 11:18:33 PM »
You never know where the bottom is. It could have been on friday, or it could be in a few years. You never know.

HOWEVER the one thing that is for sure: if you keep on investing steadily for about 10 years, it really won't matter where the bottom is. The more you try to hold cash and wait for the bottom, the more risk you take on. Unless there's a thermonuclear war and 99% of humanity gets wiped out, buy and hold seems like it should work. Especially if you aren't going to retire tomorrow, you shouldn't worry. If the market goes down, that just means worse returns now, better returns next time, since you are going to buy more.

johnny847

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #44 on: January 11, 2016, 11:36:12 PM »
I'm an accidental timer.

I had both my Roth and my husband's Roth maxed out for 2015 and invested in our typical allocation of stocks/bonds on, like January 2nd last year.  I do this every year, and I think nearly every year after I contribute there's a dip in the next day or two.  It annoys me, but I don't really care because I know lump sum, the earlier the better, beats other choices.

This year I was ready to fund our IRAs ASAP, as usual.  But I decided we should switch to traditional IRAs.  So that required opening a new account. 

I either missed a step, or Vanguard has some sort of policy about the money first going into a holding fund (money market) of sorts.  I called as soon as I could that same day to find out how to move it.  Easy peasy, just do it online. 

Went to do it online, but then learned that I couldn't invest in Admiral shares because the minimums are based on that individual account, not your investments across vanguard.  Figured I should call back and first do a roll-over that's been hanging out on my to-do list first, then I can invest the 2016 contributions in Admiral shares. 

New traditional Roth still has $5,500 just sitting in the money market.  I have tried calling Vanguard several times since then, and for some reason or another haven't been able to complete the rollover.  (Call went on too long and I had a meeting I had to attend, so I had to cut it off.  Called at 9:30 thinking they closed at 10.  Called on a weekend and they weren't open.  Called and then a kid needed me.)

Since this is taking me so long (we are going on a week now), and prices keep dropping, I'm like "hey, good thing I can't seem to get anything done!  Hmm, maybe I should do that rollover and let the $5,500 sit for a while until it see it coming back just a bitty bit.."  I know market timing is stupid, that's why I do things the way I do.  But I'm suddenly finding it almost irresistible...

You've got an interesting typo there

catccc

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #45 on: January 13, 2016, 11:28:15 AM »
New traditional Roth still has $5,500 just sitting in the money market.  I have tried calling Vanguard several times since then, and for some reason or another haven't been able to complete the rollover.  (Call went on too long and I had a meeting I had to attend, so I had to cut it off.  Called at 9:30 thinking they closed at 10.  Called on a weekend and they weren't open.  Called and then a kid needed me.)

You've got an interesting typo there

Ha!  Will go back and correct.  IDK why, but I do that one all. the. time.  Actually, I think it's because I've always had only a roth, so roth and IRA are synonyms in my mind....

stlbrah

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #46 on: January 13, 2016, 02:47:55 PM »
Maxed my 2016 contribution out on 1/02. Not the best timing, but it won't matter by the time I actually use it.

thepokercab

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #47 on: January 13, 2016, 04:33:34 PM »
I make it a habit to just fund our IRA's on Jan 2 every year and be done with it, and keep the same old monthly contribution to my taxable account.   I have a tendency to over analyze everything and would no doubt find myself questioning myself at every turn if i let these things be some sort of decision that i was forcing myself to make every month or year.

For better or worse, i believe that in the long term the market always goes up.  Everything else is just noise. 

opnfld

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #48 on: January 13, 2016, 05:42:36 PM »
So what are most people doing? Or what would they do in my shoes and why?
Determine how much money you have invested across all your accounts, retirement and taxable.  Determine how much risk you are willing to take http://paulmerriman.com/fine-tuning-your-asset-allocation-2014/.  Purchase your preferred ratio of stocks and bonds (VTSAX and VBMFX will work). Track your stock/bond ratio.  When that ratio fluctuates 5% in either direction, rebalance accordingly. 

With this plan, when stocks go down, you buy stocks.  When stocks go up, you either sell stocks, or buy bonds with new money.  It's automatic; every question you ask yourself is already answered.  It's textbook bogleheads informed by Paul Merriman and, as far as I have read, echoed by JL Collins.

stlbrah

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Re: Wait a minute.. I was about to put in max for roth ira tonight UNTIL
« Reply #49 on: January 14, 2016, 06:29:45 AM »
I like auto-deposit every week into my taxable because then it doesn't matter what the market does since you're buying during the highs and the lows.