to invest now or wait?
to invest now or wait?
Hello,
I just retired, and at mid April was in the process of moving money from 401K to Vanguard, with plans to invest in Index funds. the transfer was as cash. Market started to run up and I waited and waited for the right time to buy Index Stock fund and now it is really scary to buy into stock market. Or it is not?
I understand I should not try to time the market, but it run crazy up for so long, it is scary.
what should I do now?
Confused.
I just retired, and at mid April was in the process of moving money from 401K to Vanguard, with plans to invest in Index funds. the transfer was as cash. Market started to run up and I waited and waited for the right time to buy Index Stock fund and now it is really scary to buy into stock market. Or it is not?
I understand I should not try to time the market, but it run crazy up for so long, it is scary.
what should I do now?
Confused.
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Re: to invest now or wait?
There have been a number of threads on this. No one knows what the market will do. Certainly not me. If I knew, I'd make a LOT of money.
Brian
Brian
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Re: to invest now or wait?
Waited for the right time to buy? You've just been diagnosed with a case of "market-timing-itis".enret wrote:Hello,
I just retired, and at mid April was in the process of moving money from 401K to Vanguard, with plans to invest in Index funds. the transfer was as cash. Market started to run up and I waited and waited for the right time to buy Index Stock fund and now it is really scary to buy into stock market. Or it is not?
I understand I should not try to time the market, but it run crazy up for so long, it is scary.
what should I do now?
Confused.
Now that we've got the diagnosis out of the way, what does your Investment Policy Statement say? Do you have one?
What is the asset allocation you've selected and are most comfortable with? We know from your statement above 100% equity is not in your comfort range, nor should 90% or even 70%? So you have to figure that one out based on your ability to be able to sleep at night and function during the day, without checking the monitor every 5 seconds on the market direction. A good place to start would be to read some of the books on the recommended reading list, if you haven't already.
List out your investments as shown in the wiki....so you'll be more likely to receive a valid prescription for your troubles from the forum members at large.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: to invest now or wait?
Avoid market-timing. Stay the course.
Chaz |
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“Money is better than poverty, if only for financial reasons." Woody Allen |
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http://www.bogleheads.org/wiki/index.php/Main_Page
- ruralavalon
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Re: to invest now or wait?
Investing now in a lump sum is usually (about 2/3 of the time) the best choice, https://pressroom.vanguard.com/nonindex ... raging.pdf .
If that is too nerve wracking, invest in segments periodically (say 10% the 1st of the month for the next ten months). Set up a definite schedule and keep to it, so that you do not again force yourself into the impossible task of trying to pick the "best time" to put the next segment into the market.
If that is too nerve wracking, invest in segments periodically (say 10% the 1st of the month for the next ten months). Set up a definite schedule and keep to it, so that you do not again force yourself into the impossible task of trying to pick the "best time" to put the next segment into the market.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: to invest now or wait?
You've already proven once that you cant predict near term market movements.
"Index funds have a place in your portfolio, but you'll never beat the index with them." - Words of wisdom from a Fidelity rep
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Re: to invest now or wait?
More importantly, enret, what is your Asset Allocation?
Retired folks aren't usually more than 50% in equities.
What will you put the non-equity $$$ into? Bonds or CDs?
Retired folks aren't usually more than 50% in equities.
What will you put the non-equity $$$ into? Bonds or CDs?
Attempted new signature...
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Re: to invest now or wait?
I am in a similar situation as the original poster. I am planning to move money around in the next couple of months. I plan to do what the quoted post says. However, I have read enough about how discipline to adhere to the plan can be; so I am hoping that I will have the discipline needed when the right time comes to make portion investments in a timely manner. I suggest the original poster should recognize this.ruralavalon wrote:Investing now in a lump sum is usually (about 2/3 of the time) the best choice, https://pressroom.vanguard.com/nonindex ... raging.pdf .
If that is too nerve wracking, invest in segments periodically (say 10% the 1st of the month for the next ten months). Set up a definite schedule and keep to it, so that you do not again force yourself into the impossible task of trying to pick the "best time" to put the next segment into the market.
Re: to invest now or wait?
The market is 'way up' since mid-April?
Really?
Really?
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Re: to invest now or wait?
Like 5-8%, depending on when you start.roymeo wrote:The market is 'way up' since mid-April?
Really?
Brian
Re: to invest now or wait?
Article on dca
http://www2.stetson.edu/fsr/abstracts/v ... m1_p51.pdf
Just FYI
More articles
http://www2.stetson.edu/fsr
http://www2.stetson.edu/fsr/abstracts/v ... m1_p51.pdf
Just FYI
More articles
http://www2.stetson.edu/fsr
VTI, VBR, VTWV, SCHH, VXUS, VEA, VWO, VSS, FM, VNQI, VBTLX, VFITX, SCHP, VWITX, IBONDS, EEBONDS, EF(EverBank), UTAH-529
Re: to invest now or wait?
OP, you're not the first to ask this, no matter where the market is. The answer is who knows(?), so invest now, according to your plan.
Perhaps there should be a sticky regarding this question since it's asked so much?
JT
Perhaps there should be a sticky regarding this question since it's asked so much?
JT
Re: to invest now or wait?
I ask because on my first playing with the charts I started on April 15th and saw NASDAQ first went down 4% to end up 4%, Dow Jones down 2% then up 2% (though with today's numbers they're both up a touch more than that. But that doesn't seem like "way up" in that time frame, especially since it went "way down", too. With the volatility, sure I can get 8% by starting several days later, but that just tells me that those moves aren't "way up", they're just volatile.Default User BR wrote:Like 5-8%, depending on when you start.roymeo wrote:The market is 'way up' since mid-April?
Really?
Brian
roymeo
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Re: to invest now or wait?
Using VTSMX as the best bet for "the market", I get a growth of 10k starting at 4/15 ending at 5/17 as 10,791.03. If you start a few days earlier on 4/12 it's 10,522.61. Hence my 5-8%.roymeo wrote:I ask because on my first playing with the charts I started on April 15th and saw NASDAQ first went down 4% to end up 4%, Dow Jones down 2% then up 2% (though with today's numbers they're both up a touch more than that. But that doesn't seem like "way up" in that time frame, especially since it went "way down", too. With the volatility, sure I can get 8% by starting several days later, but that just tells me that those moves aren't "way up", they're just volatile.Default User BR wrote:Like 5-8%, depending on when you start.roymeo wrote:The market is 'way up' since mid-April?
Really?
Brian
Re: to invest now or wait?
The Wizard wrote:More importantly, enret, what is your Asset Allocation?
Retired folks aren't usually more than 50% in equities.
What will you put the non-equity $$$ into? Bonds or CDs?
Thanks for your answers.
I plan 40% in stock index, 10% Vanguard fund dividend appreciation, 50% bonds.
I allocated 50% of planned bonds, but stuck with equities, don't have a nerve
probably should do in smaller parts on schedule. I never had to deal with significant amount in one shot.
enret
Re: to invest now or wait?
And he's afraid he'll prove it again when he buys in right before the market corrects 10-20%. He's the type of investor that the market prays on. While he waits, the market goes up and down, but only a little, but each week up 1-2% making new highs waiting for for just the time when he finally caves and hits the buy button. Right then, it pounces and drops.momar wrote:You've already proven once that you cant predict near term market movements.
Re: to invest now or wait?
As noted in another thread at the time, end-of-day April 15th was a great time to buy. Small-cap value is up >9% since then.roymeo wrote:I ask because on my first playing with the charts I started on April 15th and saw NASDAQ first went down 4% to end up 4%, Dow Jones down 2% then up 2% (though with today's numbers they're both up a touch more than that. But that doesn't seem like "way up" in that time frame, especially since it went "way down", too. With the volatility, sure I can get 8% by starting several days later, but that just tells me that those moves aren't "way up", they're just volatile.
roymeo
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Re: to invest now or wait?
Take heart in the fact that this is how most of the population (myself included) behave; but we can get better. It's important for us to remind ourselves that it is never too late.enret wrote:Hello,
I just retired, and at mid April was in the process of moving money from 401K to Vanguard, with plans to invest in Index funds. the transfer was as cash. Market started to run up and I waited and waited for the right time to buy Index Stock fund and now it is really scary to buy into stock market. Or it is not?
I understand I should not try to time the market, but it run crazy up for so long, it is scary.
what should I do now?
Confused.
Re: to invest now or wait?
Put it in your mattress and wait for a sign from the heavens
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Re: to invest now or wait?
I left my firm in December 1999 to do part-time consulting from home. I'm fully retired now. When I left my firm, I immediately rolled my 401K into a Vanguard IRA, with similar investments. As we all know from history, the market crashed starting in March 2000. So, I went though exactly what you fear the most. Well, it didn't really make any difference at all, because my equities would have gone down if I had stayed in my 401K or as they did in my rollover IRA, then they came back, then they crashed again, then they came back. Today, I have a whole lot more than I had back then, so it all comes out in the wash sooner or later. Good luck.
Re: to invest now or wait?
You mean you don't have the nerve to pull the trigger on your bond allocation, so you stayed all in stocks?enret wrote: Thanks for your answers.
I plan 40% in stock index, 10% Vanguard fund dividend appreciation, 50% bonds.
I allocated 50% of planned bonds, but stuck with equities, don't have a nerve
probably should do in smaller parts on schedule. I never had to deal with significant amount in one shot.
enret
The anti-bond fear mongering bandied about on this forum and elsewhere has got people avoiding bonds in favor of far riskier equities.
What should you do now? My advice: Since you just retired I'm assuming your investment horizon is long. So just go ahead and pull the trigger, get 100% invested per your plan, do this on Monday, then stay the course. The market will go up and down. Don't try to time it. If this prospect makes you too nervous to sleep, make a more conservative plan. Good luck.
INSERT PITHY QUOTE HERE
Re: to invest now or wait?
Focus on Time rather than Timingenret wrote:Hello,
I just retired, and at mid April was in the process of moving money from 401K to Vanguard, with plans to invest in Index funds. the transfer was as cash. Market started to run up and I waited and waited for the right time to buy Index Stock fund and now it is really scary to buy into stock market. Or it is not?
I understand I should not try to time the market, but it run crazy up for so long, it is scary.
what should I do now?
Confused.
Re: to invest now or wait?
No, he prays. The market preys.inbox788 wrote:And he's afraid he'll prove it again when he buys in right before the market corrects 10-20%. He's the type of investor that the market prays on. While he waits, the market goes up and down, but only a little, but each week up 1-2% making new highs waiting for for just the time when he finally caves and hits the buy button. Right then, it pounces and drops.momar wrote:You've already proven once that you cant predict near term market movements.
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Re: to invest now or wait?
Wait for what?
Re: to invest now or wait?
Yes. Unless 8~9% means nothing to you.roymeo wrote:The market is 'way up' since mid-April?
Really?
Re: to invest now or wait?
Consider that anyone who is currently "in" the market could sell at any time. Then buy again the next day, sell again, etc. So everyone here who is already in is also implicitly choosing to re-buy every day. "Holding" is a false concept. So if you were "in" a year ago, would you be selling now?
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Re: to invest now or wait?
X2tacster wrote: What should you do now? My advice: Since you just retired I'm assuming your investment horizon is long. So just go ahead and pull the trigger, get 100% invested per your plan, do this on Monday, then stay the course. The market will go up and down. Don't try to time it. If this prospect makes you too nervous to sleep, make a more conservative plan. Good luck.
Except I would keep a little bit set aside with which to play the market timing game. . .that way it appeases my emotional gambling self.
If I beat the market, great! If not, lesson learned! (again)
But bear this in mind. . .my crystal ball tells me that the market will do well until the middle of the second term.
(Can't talk politics, so I hope you get my drift.)
In the latter half of 2014 you need to average out.
Last edited by PacNorWest on Wed May 22, 2013 12:01 pm, edited 1 time in total.
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Re: to invest now or wait?
I had a windfall to invest last Fall. After spending a lot of time with Firecalc (firecalc.com - which I really recommend) I have come to the conclusion that timing does matter - a little. But it is not necessary to get in at the best time, only that you not get in at one the worst time (e.g., top of a bubble). There have been about 8 of those (based on playing with Firecalc and finding a lot of portfolio plans that have 8 failures). So unless you think we are at the top of a bubble, I would say get in the game and trust to "time, not timing" as one post said.
BTW I ended going minimalist (aka "Lazy" aka "Bogleheads" approach) with roughly 50% of the money in the stock market, and that split with a broad US based ETF and 2 overseas ETFs (all selected by my adviser). As luck would have it - I invested at a "good time". But I say that is just dumb luck.
BTW, I also have a small (~2% of my nest egg) that I use to play with - to see if I can beat the market. You can use an account like that to keep yourself from messing with your nest egg.
BTW I ended going minimalist (aka "Lazy" aka "Bogleheads" approach) with roughly 50% of the money in the stock market, and that split with a broad US based ETF and 2 overseas ETFs (all selected by my adviser). As luck would have it - I invested at a "good time". But I say that is just dumb luck.
BTW, I also have a small (~2% of my nest egg) that I use to play with - to see if I can beat the market. You can use an account like that to keep yourself from messing with your nest egg.