Told myself I'd invest tomorrow...

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Told myself I'd invest tomorrow...

Postby boggler » Tue May 07, 2013 7:17 pm

Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?
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Re: Told myself I'd invest tomorrow...

Postby steve r » Tue May 07, 2013 7:32 pm

boggler wrote:Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?


No!

Not because of the market but because you are still grasping for a plan.

At best, invest 1/3 in your best idea (tomorrow is fine) ... 1/3 in 6 months (maybe a new plan) and all in a year. Nothing sharpens one understanding of the behavioral aspects of investing MORE than losing or making money (but particularly losing).

If today spooked you - imagine how you react on a really bad day.
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Re: Told myself I'd invest tomorrow...

Postby John3754 » Tue May 07, 2013 7:37 pm

Here is a quote from one of your other posts:

"I'm willing to take a lot of risk and stay the course..."

You sure about this? Sounds like you're a little nervous about the volatility of the market.
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Re: Told myself I'd invest tomorrow...

Postby Middle » Tue May 07, 2013 7:38 pm

What's your time horizon for when you'll need it? How much of your total portfolio does the $200k represent? What is your risk tolerance? What is your desired AA?

The answers to these questions should help guide you. If you have 15 to 20 years before you'll need it, then it is reasonable to believe that any upcoming corrections will be subsequently bought.

You can dollar cost average in, but you don't want to stretch that out over a very long time (I've read that less than one year and closer to 6 months is best).

But best to develop an investment plan which would involve answering those questions.
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Re: Told myself I'd invest tomorrow...

Postby boggler » Tue May 07, 2013 7:40 pm

John3754 wrote:Here is a quote from one of your other posts:

"I'm willing to take a lot of risk and stay the course..."

You sure about this? Sounds like you're a little nervous about the volatility of the market.


Point taken. From my past experience, though, I know that once I'm fully invested I'll stop freaking out. The problem is just getting invested in the first place.
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Re: Told myself I'd invest tomorrow...

Postby Rick Ferri » Tue May 07, 2013 7:56 pm

boggler wrote:Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?


Ahhh, the perils of market timing. You'd be asking yourself the same question if the market went down dramatically over the past few days.

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Re: Told myself I'd invest tomorrow...

Postby boggler » Tue May 07, 2013 8:01 pm

Rick Ferri wrote:
boggler wrote:Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?


Ahhh, the perils of market timing. You'd be asking yourself the same question if the market went down dramatically over the past few days.

Rick Ferri


Heh - good point. So I guess the best thing is just to invest as planned and be done with it?
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Re: Told myself I'd invest tomorrow...

Postby Rick Ferri » Tue May 07, 2013 8:05 pm

I'll let you know the day after you invest. :wink:

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Re: Told myself I'd invest tomorrow...

Postby Fallible » Tue May 07, 2013 8:19 pm

boggler wrote:Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?


The "spooked" you mention is your risk tolerance staring you in the face, asking/telling you to get to know how much risk you can handle in order to stay the course. Your decision really is how to get into the market now so that you can stay in it. Have you determined an asset allocation based on your risk tolerance? And do you know your risk capacity?
Last edited by Fallible on Wed May 08, 2013 9:05 am, edited 1 time in total.
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Re: Told myself I'd invest tomorrow...

Postby Toons » Tue May 07, 2013 8:33 pm

boggler wrote:Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?


Try this train of thought,When considering "investing" tell yourself you will leave the money alone for a minimum of 10 years.No guarantees that the outcome will be what you want ,but it will help alleviate in your mind what short term moves in the market will have on your investment.
I say invest tomorrow ,if you don't it is just one less day your money is working FOR you. :happy
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Re: Told myself I'd invest tomorrow...

Postby Artsdoctor » Tue May 07, 2013 8:51 pm

Two questions to consider:

1. Is $200,000 a large chunk of your portfolio?

2. Are you a seasoned investor?

Answer the second one first. If you have not lived through a significant downturn in the market, then go in gradually. Studies consistently show that investing all at once will OFTEN result in superior returns as opposed to gradual investment. But that doesn't mean that it ALWAYS will. And if you've not lived through a downturn, you're likely to bail at the wrong time, regardless of what you might think right now.

All that said, if the $200,000 represents only 5% of your assets, by all means, go for it! But if this is the beginning of your investment life because of a substantial windfall, gradually entering the market would probably be the wisest thing.
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Re: Told myself I'd invest tomorrow...

Postby assumer » Tue May 07, 2013 9:01 pm

boggler wrote:Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?


Perhaps pick a plan, like put 1/10 in tomorrow, 1/10 in next week, etc., for the next 10 weeks, regardless of the market, that you'd feel comfortable regardless of the market's moves. Maybe your problem was "put it all in"?
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Re: Told myself I'd invest tomorrow...

Postby The Wizard » Tue May 07, 2013 9:06 pm

I've had significant percentages and increasing actual dollar amounts in the stock market since I started investing in 1973.
I've never fooled around and been out of the market at all, just redirected where my new contribs went.
I can scarcely believe all the new posts like this one lately.
I hope we're not setting up for another equity crash yet, but I think we've more to go with this bull run.
Regardless, I think I'll rebalance 1% from equities to HY bond tomorrow if this market uptick continues...
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Re: Told myself I'd invest tomorrow...

Postby The Wizard » Tue May 07, 2013 9:13 pm

Oh, and what's odd about the OP is, he/she says nothing about the split of that $200K between equities and non equities.
I'd have no problem replicating my AA with an additional $200K, but this poster may be talking all stocks.
I'm not sure if we should laugh or cry when these folks start coming out....
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Re: Told myself I'd invest tomorrow...

Postby assumer » Tue May 07, 2013 9:17 pm

The Wizard wrote:Oh, and what's odd about the OP is, he/she says nothing about the split of that $200K between equities and non equities.
I'd have no problem replicating my AA with an additional $200K, but this poster may be talking all stocks.
I'm not sure if we should laugh or cry when these folks start coming out....


I usually assume that "got xxx to invest" implies it's in cash or highly liquid places (e.g. savings account) but that may not be a good assumption... And neither laugh nor cry, just offer advice as best as we can is all we can do.
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Re: Told myself I'd invest tomorrow...

Postby InvestorNewb » Tue May 07, 2013 9:23 pm

If I could do it two months ago with double the amount, you can do it today.

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Re: Told myself I'd invest tomorrow...

Postby Fallible » Tue May 07, 2013 9:26 pm

The Wizard wrote:Oh, and what's odd about the OP is, he/she says nothing about the split of that $200K between equities and non equities.
...


Yes, that's why I have asked if he/she has determined an asset allocation, and one based on risk tolerance and capacity.
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Re: Told myself I'd invest tomorrow...

Postby JW Nearly Retired » Tue May 07, 2013 9:28 pm

boggler wrote: Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?

You are asking a lot of people who are in the market if you would be foolish to be in the market? If that's your question then my answer is maybe, we can't know what's in your head. If it's something else please clarify the question.
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Re: Told myself I'd invest tomorrow...

Postby The Wizard » Tue May 07, 2013 9:31 pm

assumer wrote:
The Wizard wrote:Oh, and what's odd about the OP is, he/she says nothing about the split of that $200K between equities and non equities.
I'd have no problem replicating my AA with an additional $200K, but this poster may be talking all stocks.
I'm not sure if we should laugh or cry when these folks start coming out....


I usually assume that "got xxx to invest" implies it's in cash or highly liquid places (e.g. savings account) but that may not be a good assumption... And neither laugh nor cry, just offer advice as best as we can is all we can do.

That $200K is highly liquid, yes, but this person is possibly going to put it ALL in equities?
While at the same time, those of us with lots more that that already in equities may be selling off small equity increments month by month to keep from getting overweighted.
I'm seeing Blatant Performance Chasing here; do what you can to convince me otherwise...
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Re: Told myself I'd invest tomorrow...

Postby pkcrafter » Tue May 07, 2013 9:47 pm

Fallible wrote:
The Wizard wrote:Oh, and what's odd about the OP is, he/she says nothing about the split of that $200K between equities and non equities.
...


Yes, that's why I have asked if he/she has determined an asset allocation, and one based on risk tolerance and capacity.

Boggler has said he wants 100% stock (VT) and also wants to borrow against it.
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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Re: Told myself I'd invest tomorrow...

Postby Default User BR » Wed May 08, 2013 3:40 pm

pkcrafter wrote:
Fallible wrote:
The Wizard wrote:Oh, and what's odd about the OP is, he/she says nothing about the split of that $200K between equities and non equities.
...

Yes, that's why I have asked if he/she has determined an asset allocation, and one based on risk tolerance and capacity.

Boggler has said he wants 100% stock (VT) and also wants to borrow against it.

And has a thread going about the Permanent Portfolio. Deciding on WHAT to buy comes well before WHEN to buy.


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Re: Told myself I'd invest tomorrow...

Postby Grt2bOutdoors » Wed May 08, 2013 3:41 pm

boggler wrote:Got $200k to invest. I told myself I'd put it all in Wednesday (tomorrow). But the market has gone up dramatically over the past few days, and now I'm spooked. Should I still do it?


Guess what? The market is up again, today. Start reading.......
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Re: Told myself I'd invest tomorrow...

Postby InvestorNewb » Wed May 08, 2013 3:47 pm

He should stick with his original plan of VT.

Boggler reminds me of me when I first started posting here; lots of questions, very indecisive, all over the place, afraid to take action. It's all part of the journey.
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Re: Told myself I'd invest tomorrow...

Postby boggler » Wed May 08, 2013 4:04 pm

InvestorNewb wrote:He should stick with his original plan of VT.

Boggler reminds me of me when I first started posting here; lots of questions, very indecisive, all over the place, afraid to take action. It's all part of the journey.


Bought some VT this morning. :)
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Re: Told myself I'd invest tomorrow...

Postby Hub » Wed May 08, 2013 5:47 pm

I'm not sure I understand the direct connection often made between how trepedation on when to enter the market equates vs one's risk tolerance.

I have a piddly $10k or so in cash from filling 2012 Roths and ESAs in April, and even going all in with that has bothered me. However, once I do go in I'm quite certain that there's no amount of volatility that could make me sell during a drop. Though a big drop would make me lament not having more cash with which to buy more with onces stocks go on sale again.

Maybe I'm kidding myself, but I really don't see risk tolerance and lump summing into a bull market run as that closely related in my head considering how often it is commonly espoused from members much wiser and more experienced than me.
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Re: Told myself I'd invest tomorrow...

Postby steve r » Wed May 08, 2013 6:00 pm

InvestorNewb wrote:
Boggler reminds me of me when I first started posting here; lots of questions, very indecisive, all over the place, afraid to take action. It's all part of the journey.


+1 reminds me of me too ... curious, wants to learn, etc. (is there anyone who thought he wouldn't buy something?)

Good luck B!
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Re: Told myself I'd invest tomorrow...

Postby pkcrafter » Wed May 08, 2013 9:26 pm

Bought some VT this morning.


Oh, no, market drop tomorrow. :shock:

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Re: Told myself I'd invest tomorrow...

Postby Fallible » Wed May 08, 2013 9:35 pm

pkcrafter wrote:
Bought some VT this morning.


Oh, no, market drop tomorrow. :shock:

Paul


No prob...market will be back up Friday. :D
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Re: Told myself I'd invest tomorrow...

Postby InvestorNewb » Thu May 09, 2013 1:36 pm

boggler wrote:
InvestorNewb wrote:He should stick with his original plan of VT.

Boggler reminds me of me when I first started posting here; lots of questions, very indecisive, all over the place, afraid to take action. It's all part of the journey.


Bought some VT this morning. :)


Congrats. :sharebeer

pkcrafter wrote:
Bought some VT this morning.


Oh, no, market drop tomorrow. :shock:

Paul


It's starting to look up again today, at least for US stocks.
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Re: Told myself I'd invest tomorrow...

Postby DAK » Thu May 09, 2013 3:37 pm

I'll pulled the cord and invested 62K in VTIAX today, after waiting a while for it to go down 2 days in row...sick of waiting for that to happen. Looks like it will be down about 1% today, good enough for a 10-20 year investment horizon. Sh*t or get off the pot, as they say.
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Re: Told myself I'd invest tomorrow...

Postby The Wizard » Thu May 09, 2013 3:44 pm

DAK wrote:I'll pulled the cord and invested 62K in VTIAX today, after waiting a while for it to go down 2 days in row...sick of waiting for that to happen. Looks like it will be down about 1% today, good enough for a 10-20 year investment horizon. Sh*t or get off the pot, as they say.

Well that's nice, but you should put it in perspective for us, with your age and total investment allocation following this move.
If, for example, you're age 45 with 65% of your total in stock funds and 35% in bonds/CDs, then I'd say you're looking good...
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Re: Told myself I'd invest tomorrow...

Postby khalestorm » Thu May 09, 2013 3:46 pm

Serious question: why do you care if the market is up or down in a day? If you are in for the long run, and are a Boglehead, isn't investing sooner than later always the better option? Unless you have a time machine...
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Re: Told myself I'd invest tomorrow...

Postby DAK » Fri May 10, 2013 10:39 am

It just seems psychologially more pleasing to invest on a day when the market is down. In theory I should not care if the investment is long term.

Age late 30's, and need to rebalane towards international as at the end of 2012 it was off.
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Re: Told myself I'd invest tomorrow...

Postby ofcmetz » Fri May 10, 2013 10:16 pm

khalestorm wrote:Serious question: why do you care if the market is up or down in a day? If you are in for the long run, and are a Boglehead, isn't investing sooner than later always the better option? Unless you have a time machine...



^ well said.

I'll add this. You should find an asset allocation that you can sleep with even if your job makes you work nights. Error a little on the side of conservative and get yourself invested.
Showing up at the donut shop at 5 am to get them hot out of the oil is an example of successful market timing.
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Re: Told myself I'd invest tomorrow...

Postby bayview » Fri May 10, 2013 10:33 pm

Fallible wrote:
pkcrafter wrote:
Bought some VT this morning.


Oh, no, market drop tomorrow. :shock:

Paul


No prob...market will be back up Friday. :D

Y'all are good! :sharebeer
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Re: Told myself I'd invest tomorrow...

Postby bayview » Fri May 10, 2013 10:37 pm

boggler wrote:
InvestorNewb wrote:He should stick with his original plan of VT.

Boggler reminds me of me when I first started posting here; lots of questions, very indecisive, all over the place, afraid to take action. It's all part of the journey.


Bought some VT this morning. :)

Congrats for getting a toe in the water!

Here's a thought: why don't you get into the market by investing in a Vanguard LifeStrategy or Target fund?

Since they contain multiple asset classes, one part should do decently even if another part stumbles.

You're not married to it, so it doesn't really matter which one you pick. (Avoid paralysis by analysis.) Just buy into one and continue to read and post and think and learn, and in the meantime, your money is in there working for you. Plenty of time to fine-tune once you really know what you want to do.
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