Author Topic: Would you.....?  (Read 1631 times)

bpage12

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Would you.....?
« on: July 27, 2019, 02:26:07 PM »
I have quite a bit of cash right now in a High Yield Savings account getting 2.10%.  Would you invest a lump sum in VTI or VTSAX right now or keep money in cash for awhile? 

frugledoc

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Re: Would you.....?
« Reply #1 on: July 27, 2019, 03:34:40 PM »
I have quite a bit of cash right now in a High Yield Savings account getting 2.10%.  Would you invest a lump sum in VTI or VTSAX right now or keep money in cash for awhile?

Depends on your time frame and asset allocation.


bpage12

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Re: Would you.....?
« Reply #2 on: July 27, 2019, 03:49:56 PM »
I am in my mid 30s with no debt and I am in 100% index funds.

BudgetSlasher

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Re: Would you.....?
« Reply #3 on: July 27, 2019, 05:53:25 PM »
Presuming you have made the determination that this is money that is open to investment (not a emergency fund or the like) . . . .

I would invest it.

Perhaps not lump sum, but I would begin to transition it to investments, perhaps a little bit at a time and month by month.

Buffalo Chip

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Re: Would you.....?
« Reply #4 on: July 27, 2019, 06:41:24 PM »
Short answer: if it were me, I would invest some in index funds. How much will depend on risk tolerance and goals.

There is a school of thought that you’ll see here that would say “put it all into VTSAX and forget it.” I disagree with that perspective for a few reasons (1) everyone’s risk tolerance and investment horizon is different. (2) I think 100% VTSAX is less than optimal. There are worse. But there might be better. We can backtest all sorts of portfolios for free, so why settle for one size fits all?.(3) US equities are expensive right now both historically and as compared to other countries.

EvenSteven

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Re: Would you.....?
« Reply #5 on: July 27, 2019, 08:03:56 PM »
I have quite a bit of cash right now in a High Yield Savings account getting 2.10%.  Would you invest a lump sum in VTI or VTSAX right now or keep money in cash for awhile?

Quote
I am in my mid 30s with no debt and I am in 100% index funds.

You can't both have quite a bit of cash in a savings account and be 100% in index funds.

Pick an asset allocation that you are comfortable with, one that reflects your desired risk profile, and invest your cash in a way that meets your asset allocation.

Andy R

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Re: Would you.....?
« Reply #6 on: July 27, 2019, 08:36:32 PM »
I put up a page answering this
The market has never been this high, should I wait to invest?
Would appreciate any feedback.

harvestbook

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Re: Would you.....?
« Reply #7 on: July 28, 2019, 07:29:28 AM »
If you don't have a specific purpose for the cash (house downpayment, vacation, upcoming medical expense), then the question is why you hold it. If it is fear of a crash, that might not be rational but it is certainly reasonable. Your answer is more important than whatever a bunch of strangers tell you THEY would do.

bpage12

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Re: Would you.....?
« Reply #8 on: July 28, 2019, 08:39:16 AM »
Thanks for the input guys!  Andy that was really well put together and extremely helpful!  Thank you so much! 

MustacheAndaHalf

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Re: Would you.....?
« Reply #9 on: July 28, 2019, 08:50:37 AM »
If you don't have international investments, I'd put the next lump sum in VXUS or VEU.  Some decades VTI beats VXUS, some decades VXUS beats VTI.

Buffalo Chip

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Re: Would you.....?
« Reply #10 on: July 28, 2019, 08:54:35 AM »
I put up a page answering this
The market has never been this high, should I wait to invest?
Would appreciate any feedback.

I read the article and I think it’s well written and applicable to most people. It doesn’t speak to me, though. The question asked is “the market has never been this high, should I wait to invest?”  My personal answer is YES. But not because of low risk tolerance or lack of education about the stock market. Although admittedly I never have enough information to be completely happy.

No, the problem I have is I just don’t see much opportunity for upside gain in US equities. And I see zero upside potential in bonds. The more I look at it, the worse it looks. The S+P 500 is hovering somewhere in the 31 range for CAPE ratio. The price is high historically as well as compared to other countries. To me that speaks to anemic returns in the future. Crash? Maybe. I wouldn’t  bet on it. And I don’t need to. The potential returns for US equities going forward are not exciting to me and I don’t see the potential risk vs potential rewards as being worth it. So I keep a relatively small percentage in US equities while I look for better opportunities and just wait.

RWD

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Re: Would you.....?
« Reply #11 on: July 28, 2019, 09:17:13 AM »
1/2013  [SP500 = 1462]
https://forum.mrmoneymustache.com/investor-alley/is-now-a-bad-time-to-invest-in-stock-index-funds/
5/2013  [1583]
https://forum.mrmoneymustache.com/investor-alley/starting-today!/
https://forum.mrmoneymustache.com/investor-alley/$80k-sitting-in-cash-bc-scared-of-high-flying-stock-mkt-punch-me/
10/2013  [1695]
https://forum.mrmoneymustache.com/investor-alley/stock-market-expensive-now-alternatives/
5/2014  [1884]
https://forum.mrmoneymustache.com/investor-alley/stock-market-is-high-am-i-too-late/
https://forum.mrmoneymustache.com/investor-alley/is-the-stock-market-too-expensive-to-get-back-in/
7/2014  [1973]
https://forum.mrmoneymustache.com/investor-alley/current-market-has-me-scared-to-invest/
9/2014  [2002]
https://forum.mrmoneymustache.com/investor-alley/is-it-a-good-time-to-invest-new-money/
10/2014  [1946]
https://forum.mrmoneymustache.com/ask-a-mustachian/stock-market-would-you-buy-now-or-wait/
1/2015  [2058]
https://forum.mrmoneymustache.com/investor-alley/stock-market-should-i-be-concerned/
3/2015  [2117]
https://forum.mrmoneymustache.com/investor-alley/talk-me-out-of-timing-the-australian-market/
12/2015  [2103]
https://forum.mrmoneymustache.com/ask-a-mustachian/where-to-put-a-large-windfall-with-stock-market-near-all-time-highs/
1/2016  [2013]
https://forum.mrmoneymustache.com/investor-alley/about-to-sell-everything-talk-me-off-the-ledge-(or-push-me-off)-please!/
2/2017  [2280]
https://forum.mrmoneymustache.com/investor-alley/does-anyone-think-we-are-in-a-bubble/
4/2017  [2359]
https://forum.mrmoneymustache.com/investor-alley/top-is-in/
6/2017  [2430]
https://forum.mrmoneymustache.com/continue-the-blog-conversation/recession-coming/
8/2017  [2476]
https://forum.mrmoneymustache.com/investor-alley/getting-scared-of-stock-market/
1/2018  [2696]
https://forum.mrmoneymustache.com/investor-alley/nervous-about-the-market/
3/2018  [2678]
https://forum.mrmoneymustache.com/investor-alley/when-would-you-get-back-in/
5/2018  [2655]
https://forum.mrmoneymustache.com/investor-alley/investing-in-a-bull-market/
6/2018  [2735]
https://forum.mrmoneymustache.com/investor-alley/moving-to-cash-market-timing-can%27t-believe-it/
10/2018  [2925]
https://forum.mrmoneymustache.com/welcome-to-the-forum/sell-index-funds-now-for-down-payment-during-recession/
2/2019  [2707]
https://forum.mrmoneymustache.com/investor-alley/welp-i'm-going-to-take-a-stab-at-timing-the-market/
4/2019  [2867]
https://forum.mrmoneymustache.com/investor-alley/buy-vtsax-now-while-its-this-high-or-wait-till-a-drop/
https://forum.mrmoneymustache.com/investor-alley/how-concerned-are-you-about-the-everything-bubble/
5/2019  [2924]
https://forum.mrmoneymustache.com/ask-a-mustachian/scared-of-investing-in-the-stock-market-now/
6/2019  [2890]
https://forum.mrmoneymustache.com/uk-tax-discussion/global-index-tracker-is-so-high!-do-i-just-keep-putting-my-money-into-it-anyway/
7/2019 [3026]
https://forum.mrmoneymustache.com/investor-alley/would-you-106836/

Miscellaneous
https://forum.mrmoneymustache.com/investor-alley/%27but-right-now-the-market-is-at-an-all-time-high-%27/
https://forum.mrmoneymustache.com/investor-alley/the-great-market-crash-of-2016!/
https://forum.mrmoneymustache.com/investor-alley/how-to-deal-with-losing-$117k-in-stock-market/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-feeling-depressed-about-global-equities-10-year-outlook/
https://forum.mrmoneymustache.com/investor-alley/stocks-will-only-return-4-annually-for-next-decade-john-bogle/

Calimerostache

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Re: Would you.....?
« Reply #12 on: July 28, 2019, 07:36:51 PM »
Thanks RWD for putting that answer together! Loved it!

markbike528CBX

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Re: Would you.....?
« Reply #13 on: July 28, 2019, 08:19:52 PM »
PTF, also to record RWD summary.   Wow, awesome!

RWD , how did you find all of the list threads?

RWD

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Re: Would you.....?
« Reply #14 on: July 28, 2019, 08:40:06 PM »
Thanks RWD for putting that answer together! Loved it!
PTF, also to record RWD summary.   Wow, awesome!

RWD , how did you find all of the list threads?
Glad you like it. I found them mostly via Google searches initially. Then I've been appending to it as new threads pop up.

bpage12

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Re: Would you.....?
« Reply #15 on: July 29, 2019, 04:48:45 PM »
Thanks RWD that list is great! Thanks for taking the time to do that!

DeniseNJ

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Re: Would you.....?
« Reply #16 on: July 30, 2019, 11:33:14 AM »
Thanks RWD for putting that answer together! Loved it!
PTF, also to record RWD summary.   Wow, awesome!

RWD , how did you find all of the list threads?
Glad you like it. I found them mostly via Google searches initially. Then I've been appending to it as new threads pop up.
Wow, that does sum things up nicely.  I feel much better now.  I was hating that the market was so high and my 401K money was buying at all time highs.  Much calmer now.  Thanks.

RWD

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Re: Would you.....?
« Reply #17 on: July 30, 2019, 11:59:55 AM »
Thanks RWD for putting that answer together! Loved it!
PTF, also to record RWD summary.   Wow, awesome!

RWD , how did you find all of the list threads?
Glad you like it. I found them mostly via Google searches initially. Then I've been appending to it as new threads pop up.
Wow, that does sum things up nicely.  I feel much better now.  I was hating that the market was so high and my 401K money was buying at all time highs.  Much calmer now.  Thanks.
You may also be interested in the [hypothetical] story of Bob, the world's worst market timer:
https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

erutio

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Re: Would you.....?
« Reply #18 on: July 30, 2019, 12:07:05 PM »
1/2013  [SP500 = 1462]
...
7/2019 [3026]

This is amazing and should be pinned.

Rosy

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Re: Would you.....?
« Reply #19 on: July 30, 2019, 05:56:25 PM »
PT come back and read all those threads RWD found and the page Andy put up.