Lump Sum

[Trying2blazy]

I have come into 100K that is sitting in a MM account because I don't know what to do with it. While I generally DCA into Vanguard retirement funds, the market is so hot now that I am paralyzed. What would you do? I don't need the money for at least the next ten years.

[surlygent]

I am kind of in the same situation, and am just lump summing half of it and then the rest monthly over 6 months.

The market IS pretty hot right now, but I am not about to guess what its going to do, so figure now is as good a time as any to jump in.

[crowd79]

Will the market keep going up? We don't know. Will it fall? We don't know. Now may never be a better time.

Just DCA into the market and forget about it. Keep waiting and you could lose out on more gains. If the market falls, then you'll be getting more shares. Stop wasting time and just do it.

[Dale_G]

It is nice to see people worried about entering the market because it is going up. It was less fun five years ago when folks worried about entering the market because it was going down.

The market goes up and down, but has tended to go up over the long haul. As the old expression goes, "The market climbs a wall of worry". If there was nothing to be worried about, the equity market would be expected to return about the same as a 30 day CD.

Dale

[bpman1192]

I would go ahead and invest the lump sum amount into several index funds and not worry about where the market is currently.
If your time horizon is at least 5 years or more, I would invest the money and not even worry about if the "timing" is right.

[Dandy]

I would put in a portion now according to your target allocation and set up a DCA for the balance over a 6 to 9 month period. Freezing is not good for investing or for your mental health. Take some action now and ease your stress by using DCA over a short timeframe.

I've been where you are. When I first started investng the Dow was about 800 and when it went up to 1200 I said I better get out because it is up 50%. I let it ride since I only had about 5% of my portfolio in equities. Imagne if I was still sitting on the sidelines waiting for the market to return to "normal" - if it did drop I would probably be afraid to invest in a market that was dropping. The S&P 500 is not quite back to it's previous high and the US economy seems to be improving. You will really be frozen if it continues to rise and you are sitting on the sidelines.

[Fallible]

I have come into 100K that is sitting in a MM account because I don't know what to do with it. While I generally DCA into Vanguard retirement funds, the market is so hot now that I am paralyzed. What would you do? I don't need the money for at least the next ten years.

You've got the money in a relatively safe place while you decide - a good start. Now read "Managing a Windfall" in the wiki: http://www.bogleheads.org/wiki/Managing_a_windfall