Putting the rest into stocks?
- InvestorNewb
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Putting the rest into stocks?
Hello,
I recently found out that my employer will be extending me for another year. I have about 70k sitting in cash that isn't earning any interest, so I'm thinking about putting the rest into stocks and splitting it between Total Stock and Total International at 70/30. By doing this, it would mean my emergency fund is down to 30k. This would put my allocation at 95%+ stocks based on my current investments.
I decided to hold off buying a home for now, as the prices in my area are just too expensive. Also, if interest rates go up, I'm guessing that a lot of people will be selling. So even though I can get a good mortgage rate for the next 5 years, the cost of the home/condo seems to have factored that in.
I basically want to "put this money to work" because I can't figure out what to do with it - which is a good problem to have.
Do stock prices generally stay flat in the summer and go up in the fall?
Thx.
I recently found out that my employer will be extending me for another year. I have about 70k sitting in cash that isn't earning any interest, so I'm thinking about putting the rest into stocks and splitting it between Total Stock and Total International at 70/30. By doing this, it would mean my emergency fund is down to 30k. This would put my allocation at 95%+ stocks based on my current investments.
I decided to hold off buying a home for now, as the prices in my area are just too expensive. Also, if interest rates go up, I'm guessing that a lot of people will be selling. So even though I can get a good mortgage rate for the next 5 years, the cost of the home/condo seems to have factored that in.
I basically want to "put this money to work" because I can't figure out what to do with it - which is a good problem to have.
Do stock prices generally stay flat in the summer and go up in the fall?
Thx.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
Re: Putting the rest into stocks?
Stock prices generally decline between May 12th at noon and June 17th at 2pm, they then go up for about 42 minutes before flattening to the end of the session. Starting June 18th you have volatile activity through to July 5th market open at which point stocks begin to go up for 2 weeks before hitting a peak at 11:34 on July 19th...
Okay, it would just be quicker to say that anybody who gives you a direct answer to that question is lying to you - nobody knows what stocks will do over short periods. Given how little you understand this, is 95% allocation to equities really a good idea?
Okay, it would just be quicker to say that anybody who gives you a direct answer to that question is lying to you - nobody knows what stocks will do over short periods. Given how little you understand this, is 95% allocation to equities really a good idea?
- nisiprius
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Re: Putting the rest into stocks?
What do you think?InvestorNewb wrote:Do stock prices generally stay flat in the summer and go up in the fall?
You should not be mentioning "interest," which is a contracted, known amount, together with stock earnings, which are not. You put "'put my money to work,'" within quotation marks, as if you were quoting someone; were you? Has someone told you you should be putting your money to work? Watch out for that; it's just a salesperson's way of saying "you should buy some of the investments I'm selling."
Nobody knows what stock prices "generally" do. If it were true that stock prices "generally" stayed flat in the summer and went up in the fall, everyone would be eager to buy stocks in the summer which, due to supply and demand, would drive up their summer price and it wouldn't be true any more. Jeremy Siegel's classic Stocks for the Long Run is very worth reading although it is propaganda and I believe it make stocks look like better and less risky investments than they are, but anyway. He has a chapter on "calendar anomalies" that's worth reading.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Putting the rest into stocks?
Yes, except when they don't.InvestorNewb wrote:Do stock prices generally stay flat in the summer and go up in the fall?
Here's an idea of how long people have been asking that question....
October: This is one of the peculiarly dangerous months to speculate in stocks in. The other are July, January, September, April, November, May, March, June, December, August, and February.
- Mark Twain
Re: Putting the rest into stocks?
Is this a serious question? Newb, you should know that B-Heads don't believe in market timing.Do stock prices generally stay flat in the summer and go up in the fall?
If I remember correctly from your previous posts, your target AA is 100% stock right? If so, then invest your money as such! Your portfolio could very possibly drop 50% overnight, but of course you already know that...
Re: Putting the rest into stocks?
If rates go up why would people be selling? I think just the opposite.
Re: Putting the rest into stocks?
When interest rates rise, bonds are more attractive to investors and the cost of capital for companies increased both having put downward pressure on stocks. People sell to move to higher yielding bonds.Rainier wrote:If rates go up why would people be selling? I think just the opposite.
Re: Putting the rest into stocks?
How are you going to feel when half of your employees get fired?InvestorNewb wrote:
I basically want to "put this money to work" because I can't figure out what to do with it - which is a good problem to have.
In all seriousness, i have read several of your posts, and you seem young and untested. Several other posters have commented on it as well. Perhaps, you just stay put for a while and ride some ups and downs while you write up an IPS.
Walk a single path, becoming neither cocky with victory nor broken with defeat, without forgetting caution when all is quiet or becoming frightened when danger threatens. -- Jigoro Kano
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Re: Putting the rest into stocks?
I applaud the OP of wanting to learn, but do agree anyone asking for market timing advice (without even realizing it) needs to do some reading. Luckily, this is as good of a place to learn so start reading and you will get your own answer to your question.
Good luck.
Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” |
-Jack Bogle
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Re: Putting the rest into stocks?
The original statement was in reference to houses, not stocks or bonds. Rainier failed to quote properly, leaving the question rather ambiguous.avalpert wrote:When interest rates rise, bonds are more attractive to investors and the cost of capital for companies increased both having put downward pressure on stocks. People sell to move to higher yielding bonds.Rainier wrote:If rates go up why would people be selling? I think just the opposite.
Brian
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Re: Putting the rest into stocks?
http://www.bogleheads.org/forum/viewtop ... 1#p1720871
My, my, how fast the tide has turned, why it's only been a mere 3 weeks when you asked this question in the link above. Let me refresh your memory "Not Happy with the Market". Now you are contemplating even more into stock?
My, my, how fast the tide has turned, why it's only been a mere 3 weeks when you asked this question in the link above. Let me refresh your memory "Not Happy with the Market". Now you are contemplating even more into stock?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
- SVariance1
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Re: Putting the rest into stocks?
I prefer to invest just prior to a big run up in stock prices
Mike
Re: Putting the rest into stocks?
When the next bear comes you're going to panic.
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Re: Putting the rest into stocks?
Are you sure it's the next bear or is it the next "beer"?John3754 wrote:When the next bear comes you're going to panic.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Putting the rest into stocks?
I'm talking about real estate and so was the OP.avalpert wrote:When interest rates rise, bonds are more attractive to investors and the cost of capital for companies increased both having put downward pressure on stocks. People sell to move to higher yielding bonds.Rainier wrote:If rates go up why would people be selling? I think just the opposite.
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Re: Putting the rest into stocks?
Bogleheads benefit from the liquidity traders provide....Grt2bOutdoors wrote:http://www.bogleheads.org/forum/viewtop ... 1#p1720871
My, my, how fast the tide has turned, why it's only been a mere 3 weeks when you asked this question in the link above. Let me refresh your memory "Not Happy with the Market". Now you are contemplating even more into stock?
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Re: Putting the rest into stocks?
If this is money earmarked for the same long-term goal as the rest of your portfolio, and if your IPS calls for you to have that level of emergency cash and a 100% stock AA, then there isn't a question. Of course you should invest it.InvestorNewb wrote:I have about 70k sitting in cash that isn't earning any interest, so I'm thinking about putting the rest into stocks and splitting it between Total Stock and Total International at 70/30. By doing this, it would mean my emergency fund is down to 30k. This would put my allocation at 95%+ stocks based on my current investments.
If you have a question, then maybe you don't have an IPS or maybe your willingness and need to take risk don't match up with the risk you're taking.