Author Topic: Wait or jump in ?  (Read 2777 times)

gsd802

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Wait or jump in ?
« on: February 28, 2020, 05:25:36 AM »
Hello,

When I left Edward Jones to move to Vanguard, I had to sell within my IRAs so I could invest that money back into Vanguard. Well I never got around to reinvesting so itís just sitting there in the money market. reason being, I wasnít sure exactly which funds to invents in. This was in the beginning of the year. I definitely missed out on some gains, but now that the market is dropping, costs are lower, and itís time to invest.

Question is, with this Coronavirus scare, do I hold off a little longer or just dive in now? I know the majority say never time the market, and this would sort of be classified as timing, but seems like itís that itís going to keep dropping - but for how long?

-My 3 accounts are my individual account which is 100% VTSAX.
-401k that I no longer have employer contribution
-ROTH IRA which I max first week of each year.
óóI also put in an additional 10-15% of gross pay into my individual account / year

Between the two IRAs that are sitting in money market thereís about $80,000. I am 30, and was originally thinking of VASGX but now thinking I want to stick with a 3 fund like VTSAX, VTIAX, and VBTLX. AA of something like 75/15/10.

My other question is, do I enroll all three accounts into one big 3 fund portfolio, or do I keep my individual at 100% VTSAX and only enroll my two IRAs into the 75/15/10? And also, do I just call Vanguard and tell them the AA I want to go with and they take over from there?

Thank you
« Last Edit: February 28, 2020, 05:27:13 AM by gsd802 »

celerystalks

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Re: Wait or jump in ?
« Reply #1 on: February 28, 2020, 05:59:29 AM »
Dive right in. If you canít do that because of the volatility, then put half in right now. Then set a calendar reminder for 3/28 and put the rest in then.

Getmeouttahere

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Re: Wait or jump in ?
« Reply #2 on: February 28, 2020, 09:37:08 AM »
I'm also curious on the calling Vanguard part. I think you have to calculate those fund % yourself with how much total money you want to invest. Let me know how that goes!

Ricochet

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Re: Wait or jump in ?
« Reply #3 on: February 28, 2020, 11:52:11 AM »
Don't be scared. Dive on in, the water's fine.

dougules

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Re: Wait or jump in ?
« Reply #4 on: February 28, 2020, 12:00:46 PM »
Lock in your good luck now. 

ChpBstrd

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Re: Wait or jump in ?
« Reply #5 on: February 28, 2020, 12:45:17 PM »
You lucky bastard!


Jump in before the correction ends. You get extra shares for free now vs two weeks ago.

dougules

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Re: Wait or jump in ?
« Reply #6 on: February 28, 2020, 01:54:47 PM »
Have you thought about VTWAX?  That will balance between US (VTSAX) and non-US (VTIAX) stocks according to market weight without you needing to worry about.  If you want bonds, what about a target date fund that will balance it for you? 

gsd802

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Re: Wait or jump in ?
« Reply #7 on: February 28, 2020, 03:47:47 PM »
Have you thought about VTWAX?  That will balance between US (VTSAX) and non-US (VTIAX) stocks according to market weight without you needing to worry about.  If you want bonds, what about a target date fund that will balance it for you?

VTWAX must be a relatively new fund? I would have to look into it. Like I said before I thought about the VASGX 4 fund portfolio, but Iím not really interested in international bonds. I understand the target date fund rebalances your AA for you as time goes on.

I also read a lot on the lazy 3 fund portfolio. When I looked at the 5 year performance between the 3 funds I would invest in at my AA I chose, the 5 year weighted average performance would have been 9.91% gain. The 5 year VASGX is 7.99% or close to that.

I might over think this too much and over  analyze, but I just know I need to get invested somehow otherwise I will fall behind. Thatís why I was thinking 75% VTSAX, 15% VTIAX, and 10% VBTLX.

Iím just trying to understand if I should roll all 3 of my accounts into that one AA.

MustacheAndaHalf

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Re: Wait or jump in ?
« Reply #8 on: February 28, 2020, 07:07:13 PM »
Sounds like you're overthinking it.  You can always change your mind in a Roth account.  The money doesn't disappear, it just gets invested.  And you can decide you found a better investment, and switch.

Instead of investing all 80k at once, what if you just start with 20k?  or 10k?  You could invest 10k in an international index fund.

You could even invest in a bad choice - it would still be better than cash.  Even high expense funds beat cash over time.  While you overthink it, you're actually making the worst choice: cash.  You don't have to jump in all at once, but it's important to start.

Ready2Save27

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Re: Wait or jump in ?
« Reply #9 on: February 29, 2020, 09:29:18 AM »
You can do something called dollar cost averaging. If you have, say, $10,000 to invest, you can invest $1,000 every week, or $5,000 a month, or whatever you choose. Itís generally better to go all in at once, but this strategy can help if youíre concerned the price could continue dropping and you want to get that discount, but still want to get in now.

MoneyGoatee

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Re: Wait or jump in ?
« Reply #10 on: March 01, 2020, 11:23:43 AM »
If you are a long-term investor, then wait to see how the 100-day average or other metrics behave before buying.  If this market down time has enough duration (as it looks to be the case due to continuing lack of good news), then you have enough of a window to observe and wait.  This was what I did during 2008.  Below shows Dow during 2008 with its 100-day moving average (smooth black curve).  I started buying when the 100-day avg started to bend upward, which was about April 2009.  Those who were more conservative would use the 200-day average, which started to turn in July 2009.  Neither points were where Dow was at the lowest.  But buying at Apr or July would still give you great gains down the road.  Again, you need a long enough window to do this.  If somebody came up with a vaccine for coronavirus tomorrow and the Dow shot back up to 29k just like that, then you wouldn't have a window and the whole thing was just a non-event to long-term investors.  Dollar cost averaging is nice practice for run-of-the-mill rises and falls.  But if this could potentially be a historic drop, then you need to try to take advantage. 


« Last Edit: March 01, 2020, 12:27:37 PM by MoneyGoatee »

gsd802

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Re: Wait or jump in ?
« Reply #11 on: March 02, 2020, 04:09:13 AM »
If you are a long-term investor, then wait to see how the 100-day average or other metrics behave before buying.  If this market down time has enough duration (as it looks to be the case due to continuing lack of good news), then you have enough of a window to observe and wait.  This was what I did during 2008.  Below shows Dow during 2008 with its 100-day moving average (smooth black curve).  I started buying when the 100-day avg started to bend upward, which was about April 2009.  Those who were more conservative would use the 200-day average, which started to turn in July 2009.  Neither points were where Dow was at the lowest.  But buying at Apr or July would still give you great gains down the road.  Again, you need a long enough window to do this.  If somebody came up with a vaccine for coronavirus tomorrow and the Dow shot back up to 29k just like that, then you wouldn't have a window and the whole thing was just a non-event to long-term investors.  Dollar cost averaging is nice practice for run-of-the-mill rises and falls.  But if this could potentially be a historic drop, then you need to try to take advantage. 




Thanks for this. That helps out a lot. Having $80k in money market I was going to buy in half of it today, and then wait and see what the market does. But after reading this, I may do either just a quarter today or just hold out for a couple more months. I guess there is correct answer, because no one can predict whatís going to happen.  But I agree, the news isnít getting any better about this virus.   I plan on investing for another 25 years minimum before I retire. Goal is age 55, then be able to just work a few less hours.