Not invested. Help!

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Not invested. Help!

Postby boggler » Fri May 03, 2013 9:55 am

I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?
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Re: Not invested. Help!

Postby Jfet » Fri May 03, 2013 10:02 am

The best way is to invest everything now into your desired risk level.

The other method which may make you feel better is to average into the market over a short period.

I would probably choose averaging in over lump sum, even though I know lump sum is supposed to be better. We just seem at or near a local maxima.
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Re: Not invested. Help!

Postby Calm Man » Fri May 03, 2013 10:08 am

OP, I faced this a year ago. I too hated watching everything go up. So I decided to start quarterly averaging into my desired bond and stock allocation over a 3-4 year period. It is too long, I know, but minimizes regret in case there is a big retreat in the first year or so.
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Re: Not invested. Help!

Postby mjsmithz » Fri May 03, 2013 10:19 am

In April I went through something similar. The last year and a quarter I was with a FA who didn't invest in the asset allocation I asked him to. I was at about 40% cash cause he was "waiting for better buying opportunities". Well I got sick of waiting and started reading lots of books and this april I came up with a plan got it approved by the wife, got everything transferred and went all in. Now to some extent I was nervous because it seems like we are at market highs, but then I reminded myself timing the market is why I am in the situation I am in.
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Re: Not invested. Help!

Postby lucky3 » Fri May 03, 2013 10:28 am

Start slowly and start dollar cost averaging into a solid, core index fund (after you prepare your asset allocation). Yes the market's high but with a long time horizon you still should be in equities.

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Re: Not invested. Help!

Postby InvestorNewb » Fri May 03, 2013 10:40 am

You remind me of me in November 2012. In February 2013 I went all in. With the way things are going right now, I'm happy I did.
Current Holdings: VTI, VXUS, VNQ, VCE (largest to smallest)
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Re: Not invested. Help!

Postby Boglenaut » Fri May 03, 2013 10:47 am

boggler wrote:I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?


If you are freaking out over missing a run-up, odds are you'll really freak out during a crash. I suggest setting a conservative allocation for your age and situation.
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Re: Not invested. Help!

Postby boggler » Fri May 03, 2013 10:52 am

Boglenaut wrote:
boggler wrote:I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?


If you are freaking out over missing a run-up, odds are you'll really freak out during a crash. I suggest setting a conservative allocation for your age and situation.


As soon as I'm fully invested, I stop worrying about it. The difficult part is getting to that point.
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Re: Not invested. Help!

Postby Imbros » Fri May 03, 2013 11:15 am

Boglenaut wrote:
boggler wrote:I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?


If you are freaking out over missing a run-up, odds are you'll really freak out during a crash. I suggest setting a conservative allocation for your age and situation.


Seconded.

Just setup an automated recurring investment at Vanguard with a fund or three, and start investing a certain portion of the cash every month.
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Re: Not invested. Help!

Postby Dandy » Fri May 03, 2013 4:23 pm

To me the best way is to do something - even if it is small. e.g. if you know you are going to allocate money to the Total Stock Market but don't know how much. Put $5,000 or $10,000 in. (I'm assuming when you figure out your allocation you will want to have much more than that.) The point is you don't have to have everything figured out just a rough idea of some of your choices and then do something. You will feel better and it will make the next investment easier.

Once you decide put a small amount in each fund and then DCA in over the next 6 months or so.
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Re: Not invested. Help!

Postby Scooter57 » Fri May 03, 2013 5:05 pm

Remind yourself that the market undergoes a significant drop almost every year and a huge drop every now and then that takes years to recover.

Go look at the chart of the S&P500 on finance.yahoo.com. look at the charts for the last 2, 5, and 10 years and see just how up and down the market can be. Yes, it might just keep going up, but it is just as likely that something could happen next week or month that sends it down 30%--or more.

Over time the market tends to go up, but it can stay down or sideways for many years at a time. And the next time it drops, the Fed isn't going to be able to haul it back up because they have already done what they can do.
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Re: Not invested. Help!

Postby roymeo » Fri May 03, 2013 5:16 pm

Choose an appropriate TR fund, put it all in, and then devise a suitable plan, write it down, act on it.
The sewer system is a form of welfare state. | -- "Libra", Don DeLillo
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