I just invested a lump sum

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cat5
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I just invested a lump sum

Post by cat5 »

Dear Anyone who is Interested in the Lump Sum investing vs DCA topic,

I have been hemming and hawing for years about investing a large sum of money. Well, I just did it. I added to my existing VG accounts, VTIAX and VTSAX...I must say, I feel like crying, tears actually came to my eyes...this is purely psychological, I realize. But I am sure it is not unusual to fear the loss of your hard earned capital or an inheritance. That may be worse, since you may recognize the efforts of others on your behalf and can't make a move. Whatever the reasons, the emotions are the same, that rather sick feeling in the pit of your stomach that courses throughout your body saying "No, don't do it now."

As I have said, I have put this off for a long time. But there is also pain in waiting for the Big Drop, looking at the stock market day after day wondering "Is this the day?" After reading your many thoughtful posts and listening to your kind encouragement to those of us who question when and how to add, what to us seems to be, a large sum, I decided I must take action. And so I did.

It is kind of lonely, though, sitting in front of my stalwart computer, making this momentous, to me, move and not getting any feedback. So, I am throwing it out to the forum, not necessarily to be congratulated, but to let those of you who are in this boat know, you are not alone!

Good luck to all.
Thanks very much to all of you who have offered advice and encouragement on the topic of Lump Sum investing.

P.S. I am not finished implementing my portfolio, but this is a start, and, hopefully, I can make decisions with more confidence now.
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FelixTheCat
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Re: I just invested a lump sum

Post by FelixTheCat »

The emotional aspect of investing gets a lot of people. I am one of them. The fear of losing money gets me more than the thrill of making money. I know it's stupid. This is why I try to think in five year buckets.
Felix is a wonderful, wonderful cat.
flyingelvis
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Re: I just invested a lump sum

Post by flyingelvis »

Remember, a loss is not a loss until it's realized (sold). If you have a proper time horizon for investing in equities (say 5+ years) then why worry about the impending correction in the upcoming months (so say the "experts")? The market will recover.

When everyone else is panicking in a downturn, it's a buy opportunity.
Crow Hunter
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Re: I just invested a lump sum

Post by Crow Hunter »

Don't feel bad.

You aren't alone.

As soon as all the paperwork clears, I am going to have to move a middle 6 figure sum out of multiple inheritance accounts into the market going nearly in opposite directions to what the person I inherited it from had done.

From individual dividend paying stocks and bonds of US companies into a mix of International, domestic and bond index funds.

I feel nervous doing it and somewhat guilty about not keeping it in what my parents had it invested in but I am only 40 and it doesn't meet my asset allocation and I don't feel comfortable holding individual stocks and individual company bonds and the taxes on it would kill me the way it is currently invested.

So there are others in the same boat as you!

I may need some moral support myself here soon. :beer
Baj82
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Re: I just invested a lump sum

Post by Baj82 »

Wish I had the courage to lump sum last year but instead I am only partly through dollar cost averaging into the market. Would have made much more so far if I did it your way. Mind giving us a little background on your your age and current retirement assets?
Austintatious
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Re: I just invested a lump sum

Post by Austintatious »

cat5, I am NOT an expert, just an average investor trying to learn and to get it right. That said, I see that you're 35 years old. Presumably, you have two to three decades of investing ahead of you. If the market should take a dive anytime soon, the likelihood of your recovering from any loss and fairing well, over your time line, is high. If I'd just had the opportunity to invest that kind of money the way you did, I promise you that I'd be swinging from the chandelier (if I had a chandelier), singing happy days are here again, and that, with full knowledge that the market can tank at any time. I suggest that, if you have any reason to cry, it would be for sitting too cautiously on that kind of money with the kind of market we've seen over the past few years, as so many have been doing. Everyone has to decide whether they DCA or not. I can tell you that I would have done just what you did, and I'd feel great about it. I suggest that you celebrate. Then buy a couple of books on investing, to keep learning. See the Bogleheads wiki for a list of titles. Good luck!
kenner
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Re: I just invested a lump sum

Post by kenner »

I used to worry constantly about investments. Then I read everything recommended here:

http://www.bogleheads.org/forum/viewtopic.php?t=6211

and here:

http://www.bogleheads.org/forum/viewtop ... f=1&t=6212

Realizing that disclosure of my entire financial situation needed to be revealed in order to receive maximal investment advice, that I was dealing with an investment time horizon of 25 to 40 years, and listening to the advice expressed on this forum, the worry factor was dramatically reduced.
mz5077
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Re: I just invested a lump sum

Post by mz5077 »

this is really good hear folks getting into the market at this point and going all in!
although i have yet to move 40% from cash into the market, the more i read stuff here the more confident i get to do the same.
and will be doing it very shortly.
in one of the posts, this article also gives great insight into why it just doesn't matter when you add it into the market as long as you have a time horizon of over 5 years: http://awealthofcommonsense.com/worlds- ... ket-timer/

we are average people and thus have such doubts. the more we read and hear it over and over again, the better position we will be in go ALL IN!!!
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BolderBoy
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Re: I just invested a lump sum

Post by BolderBoy »

cat5 wrote:It is kind of lonely, though, sitting in front of my stalwart computer, making this momentous, to me, move and not getting any feedback. So, I am throwing it out to the forum, not necessarily to be congratulated, but to let those of you who are in this boat know, you are not alone!
Research has shown that, given a long investment horizon, the lump summers come out ahead of the DCAers - not enormously, but enough. From my reading here the choice between going LS vs DCA seems to be driven mostly by comfort level. Fretters should probably go with DCA.

That said, I'm a lump summer if I have it and obligatorily a DCAer if the funds become available gradually.

The best time to get into the market is RIGHT NOW (applies to all time periods) - hint, better to be in the market than out.
Topic Author
cat5
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Re: I just invested a lump sum

Post by cat5 »

To all who replied to me, Thanks for your commiseration. I really appreciate everything you wrote.

Baj82 asked me to share my age and retirement assets:

I am 36 years old. A few years ago, I received an inheritance of nearly 1M.

Since this money had been conservatively invested, and because it was inherited, I found it difficult to invest it in equities. After much reading, especially on the Bogleheads site, I accepted that one can invest ones own money and do just as well as many managers by investing in index funds. It took me a long time, though, to get the courage to go ahead and just do it.

Most of my money is in a taxable account. I decided to invest 60% in equites 40% in bonds and cash. Of the 60%, 40% VTIAX, 40% VTSAX, 10%VGSAX . I was thinking of investing the other 10% in an emerging market ETF or two. The rest, 40% in bonds and cash.

I have a Roth IRA, with about $50,000. Half is invested in bonds, the rest is in cash. I plan to invest the cash in 50% VTIAX and 50% VTSAX.

If anyone has any comments, I would appreciate hearing from you.

Good luck to all.
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GerryL
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Re: I just invested a lump sum

Post by GerryL »

Congratulations. Now get on with your life and ignore the markets. Just do a periodic check up to make sure your AA is still in place. Before you know it you'll have to deal with the opposite fear: moving money out from stock funds that have grown nicely into bond funds or cash where you know they won't grow at the same clip.

I'm at the stage in life where I will soon need to start living on the money I have saved and invested. I vaguely remember a time when I nervously questioned when and whether I should lump sum or DCA a chunk of money, but now I feel the anxiety around figuring out how to move into cash. But at least I don't feel paralyzed. :)
GMT-8
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Re: I just invested a lump sum

Post by GMT-8 »

Hey GerryL,

I am in the same position and feel the same anxiety regarding de-vesting. In fact I have been retired 2 years and still haven't withdrawn any money from any of my index funds.
At some point I will have to, but I have been postponing it just like Cat5. Investing or withdrawing -- either way we feel the "What if" tremors when we make a move.
Best not to over-analyze, and get on with it! (he says to himself)
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ogd
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Re: I just invested a lump sum

Post by ogd »

cat5 wrote:Most of my money is in a taxable account. I decided to invest 60% in equites 40% in bonds and cash. Of the 60%, 40% VTIAX, 40% VTSAX, 10%VGSAX . I was thinking of investing the other 10% in an emerging market ETF or two. The rest, 40% in bonds and cash.
Did you mean VGSAX or VSGAX? The first is a global real estate fund with a massive load; if you bought it, you've lost 6% of your money already. The second is a small-cap growth fund, which in the long term is not a recommended holding since it tends to underperform; Larry Swedroe calls that neighborhood "the black hole of investing". Neither of these funds belong, particularly with someone as inexperienced with equity swings on $1M as yourself (no offense intended).

Instead, just raise Total Stock and Total International Stock to 50% and call it a day. The former includes enough small cap growth; the latter includes enough emergency markets.

We generally recommend bonds in Roth, see http://www.bogleheads.org/wiki/Principl ... _placement . However, at currently low bond yields the answers are not as clear cut and holding the same alloc in both is okay unless you pay very high tax rates.

For the bigger questions:

I think 60/40 is just fine, particularly because the inheritance money is a one time thing and not something you've made (or can make back) in your career. So it's worth imagining yourself a little later on the earnings curve than normal. If you train yourself to look mostly at the combined balance before panicking, you'll find market swings a lot easier to bear.

And: I've lump summed in the market today. And the day before. And every day, by not selling. If I thought waiting for a crash made sense, I would have sold; if I thought dollar cost averaging made sense, I would have again sold and bought back in slowly. There is no material difference between that first purchase and the ongoing decision to stay in; I readily admit there's a big psychological difference, but I also think the cure is to treat them the same and tell yourself ("steel yourself") that this is your allocation rain or shine and you're done timing anything. I find that liberating. Anyway, best of luck!
Call_Me_Op
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Re: I just invested a lump sum

Post by Call_Me_Op »

cat5 wrote:Dear Anyone who is Interested in the Lump Sum investing vs DCA topic,

I have been hemming and hawing for years about investing a large sum of money. Well, I just did it. I added to my existing VG accounts, VTIAX and VTSAX...I must say, I feel like crying, tears actually came to my eyes...this is purely psychological, I realize.
You act as if one's psychological well-being is of little importance. If something is going to stress me out to the point of tears, I don't see that as the right move for me. Remember that the advantage of lump-sum over DCA is a statistical advantage - and not a large one at that.

That said, you are young and investing for the long term - and you stayed fairly conservative with 60-40. You'll be fine as long as you avoid panic selling. Good luck!
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
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cat5
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Re: I just invested a lump sum

Post by cat5 »

Thanks all for your comments and encouragement.

OGD: I meant VGSLX, the REIT index fund. I think I will go with your suggestion of 50% Vanguard total stock market and 50% vanguard total international and not purchase any emerging markets for the reasons you mentioned, as well as for the simplicity of managing these funds.

Call_Me_Op: I did not mean to undermine the psychological component to investing/decision making. The tears I experienced were not due to fear, but due to finally executing the decision that I could not bring myself to do for so long. It was a release of a great deal of tension that I had built up for many year, in the form of tears.
Thank you for the encouragement you gave me. I think I will have the courage to stay the course, at least, that is my plan.

Cat5
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Zabar
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Re: I just invested a lump sum

Post by Zabar »

cat5 wrote:Most of my money is in a taxable account. I decided to invest 60% in equites 40% in bonds and cash. Of the 60%, 40% VTIAX, 40% VTSAX, 10%VGSAX [corrected by cat5 to VGSLX]. I was thinking of investing the other 10% in an emerging market ETF or two. The rest, 40% in bonds and cash.
REIT funds such as VGSLX (Vanguard REIT Index Fund Admiral Shares) are not tax-efficient since they pay out a high level of income on which you pay taxes at your marginal income tax rate, not the lower capital gains rate. You may wish to consider putting REIT funds in your tax-advantaged retirement accounts, especially Roths.
sscritic
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Re: I just invested a lump sum

Post by sscritic »

I think you invested your $1 million the day you got it. It may have been invested in a checking account, but it was invested. All you did the other day was move your money from one investment to another. I sold a house in 2004 and had about $450k floating around. Six month CDs were paying 3% at the time, so that's what I "invested" most of it in. By the end of 2005, I had moved some of it to Vanguard, but the bulk didn't make it until 2006. It was invested the whole time; the only thing that changed was how.
Leeraar
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Re: I just invested a lump sum

Post by Leeraar »

cat5 wrote:To all who replied to me, Thanks for your commiseration. I really appreciate everything you wrote.

Baj82 asked me to share my age and retirement assets:

I am 36 years old. A few years ago, I received an inheritance of nearly 1M.

Since this money had been conservatively invested, and because it was inherited, I found it difficult to invest it in equities. After much reading, especially on the Bogleheads site, I accepted that one can invest ones own money and do just as well as many managers by investing in index funds. It took me a long time, though, to get the courage to go ahead and just do it.

Most of my money is in a taxable account. I decided to invest 60% in equites 40% in bonds and cash. Of the 60%, 40% VTIAX, 40% VTSAX, 10%VGSAX . I was thinking of investing the other 10% in an emerging market ETF or two. The rest, 40% in bonds and cash.

I have a Roth IRA, with about $50,000. Half is invested in bonds, the rest is in cash. I plan to invest the cash in 50% VTIAX and 50% VTSAX.

If anyone has any comments, I would appreciate hearing from you.

Good luck to all.
cat5,

A windfall that large is a major event. I hope you reconsidered your savings strategy and your asset allocation.

That said, once you have decided on an investment strategy you should implement it as soon as possible. If you delay, you are implementing some different strategy.

I think you have done the right thing.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Leeraar
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Re: I just invested a lump sum

Post by Leeraar »

Call_Me_Op wrote:
cat5 wrote:Dear Anyone who is Interested in the Lump Sum investing vs DCA topic,

I have been hemming and hawing for years about investing a large sum of money. Well, I just did it. I added to my existing VG accounts, VTIAX and VTSAX...I must say, I feel like crying, tears actually came to my eyes...this is purely psychological, I realize.
You act as if one's psychological well-being is of little importance. If something is going to stress me out to the point of tears, I don't see that as the right move for me. Remember that the advantage of lump-sum over DCA is a statistical advantage - and not a large one at that.

That said, you are young and investing for the long term - and you stayed fairly conservative with 60-40. You'll be fine as long as you avoid panic selling. Good luck!
I have no idea what a "statistical" advantage is.

The "advantage" of lump sum over DCA is exactly accounted for by the fact that DCA leaves money not invested.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Topic Author
cat5
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Re: I just invested a lump sum

Post by cat5 »

Dear Zabar,

Thank you for pointing out the tax consequences of the Vanguard Reit Index fund. I purchased the minimum admiral share amount, $10,000, in my taxable account.

Do you think I should sell out of this fund in my taxable account and purchase it in my Roth?

Thanks,
cat5
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Zabar
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Re: I just invested a lump sum

Post by Zabar »

cat5 wrote:Dear Zabar,

Thank you for pointing out the tax consequences of the Vanguard Reit Index fund. I purchased the minimum admiral share amount, $10,000, in my taxable account.

Do you think I should sell out of this fund in my taxable account and purchase it in my Roth?

Thanks,
cat5
Yes, I would do that. The transaction fees and tax implications should be trivial at this point. Remember, however, that you don't have to do everything at once. Your first step should be to create an investment policy statement that will serve as a touchstone for all of your investment decisions. That takes the emotionality out of it.

One more comment: you state that your Roth ($50K) is 50:50 bonds:cash. This is extremely conservative for someone your age. You have lots of time for growth, which will come from equities, not bonds or cash. Because it's a Roth, all of the growth within that account will be tax-free. Your investment policy statement should take that into account.
BogleInvestorLondon
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Re: I just invested a lump sum

Post by BogleInvestorLondon »

imgritz wrote:The emotional aspect of investing gets a lot of people. I am one of them. The fear of losing money gets me more than the thrill of making money. I know it's stupid. This is why I try to think in five year buckets.
Out of curiosity, why do you feel like this? If you have an aa that matches your risk-tolerance you should be fine.

I have everything I have in an aa of just over 80% equities. I know markets seem high but I have no idea where they are going next. All I know is that I am holding it for 20+ years and that should be fine.
synergy
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Re: I just invested a lump sum

Post by synergy »

cat5,

It sounds to me that you are moving at a pace that is comfortable for you. I believe that establishing a comfortable and realistic (for you) AA is the key to alleviating some of your anxiety. In 2005, my wife and I received a 6 figure inheritance and at the same time we moved our retirement and other savings/investment accounts to Vanguard. In 2008, the value of our investments dropped about 23% and while it was gut wrenching, we managed to not panic and to continue to educate ourselves by following the discussions on this board and by reading a series of the recommended books. As the market came back, we continued to invest in our retirement accounts and slowly adjusted our AA to the level where we are comfortable and have more than recovered from the market drop of 5+ years ago. That experience taught me the value of having an AA that accurately reflects our risk tolerance. I think that is the best protection from anxiety concerning market fluctuations. Best of luck.
Dandy
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Re: I just invested a lump sum

Post by Dandy »

Congrats, it took a lot of courage to make the first step. If you want to limit this very emotional reaction to investing I suggest you automate the investing of the rest of your money sitting on the sidelines. You don't want to go through this emotion packed drama every time you have to invest.
Good luck
Dandy
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Re: I just invested a lump sum

Post by Dandy »

Congrats, it took a lot of courage to make the first step. If you want to limit this very emotional reaction to investing I suggest you automate the investing of the rest of your money sitting on the sidelines. You don't want to go through this emotion packed drama every time you have to invest.
Good luck
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Bustoff
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Re: I just invested a lump sum

Post by Bustoff »

Look at it from another perspective -- focus on your stream of income. Even if your investment dropped considerably, the yields from Total Int. and Total Stock, which are 3.08% and 1.74%, they keep flowing in.
Topic Author
cat5
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Re: I just invested a lump sum

Post by cat5 »

Thanks to all for your encouragement and advice.

Zabar: I had purchased equities in my Roth years ago. They were invested in a family of funds that were indicted for misrepresentation. Consequently those funds went south and I sold out for a loss. After that I purchased some individual equities that likewise went south...this was before I ever heard of Vanguard...hard to believe that someone did not hear of Vanguard, but it is true.

I kept the money in cash, one bond fund, one gas trust, one REIT ( which is now going to liquidate) and one insurance company. The Tickers are DBLTX, SJT, FUR, MKL Each one paid a dividend ( except MKL), so I made something on that, but I was holding the cash until I found something I could feel confident to invest in.

I also added $ each year and eventually the dollar amount in the Roth rose to $50K. i will take your advice and eventually purchase the Vanguard REIT in my Roth...but, of course, first I should come up with an AA plan. My main goal is to keep investing simple and the 3 fund portfolio seems fine for me, as I have very little time lately to keep after more than that number of funds.

Another concern is having cash to invest when the market takes a tumble. How do you do that in a non-taxable account in which you cannot add $ at will?

I have about $25,000 in cash. I will have a little more when FUR liquidates. If I invest in Vanguard REIT Admiral Shares, what else could I invest in? All in Total Stk Mkt?

Thanks
Cat
Topic Author
cat5
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Re: I just invested a lump sum

Post by cat5 »

Once again, I feel indebted to all of you who responded to me...

Synergy: Thank you for sharing your thoughts on the value of a good AA...I appreciate the importance of coming up with a solid financial plan and sticking with it. I believe I will have the courage to ride the waves. I want so much to be at peace concerning finances and to get on with my life. There are so many other things that I have to do and worrying about finances just puts a drag on the situation.

My question though is: did you add to your taxable account during 2008? I am concerned about having cash to buy more shares during a severe downturn. Maybe that is wrong thinking. When people say they plan to hold for 20+ years, does that mean without adding more money over that time? Or do they hold cash reserves for that purpose?

Thanks.
Cat
BogleInvestorLondon
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Re: I just invested a lump sum

Post by BogleInvestorLondon »

cat5 wrote:My question though is: did you add to your taxable account during 2008? I am concerned about having cash to buy more shares during a severe downturn. Maybe that is wrong thinking. When people say they plan to hold for 20+ years, does that mean without adding more money over that time? Or do they hold cash reserves for that purpose?
I am a mere amateur so I would also like to hear other responses.

Basically, we have no idea which way the market is going or when. If you decide to keep cash (usually a terrible investment) the market might just keep going up. I personally think a positive ev move here is to lump sum and invest the lot, then just save money when you can and keep adding to your portfolio, no matter where the market is at. I do not look at the market because there is no need, it can only be negative. I don't want to feel happy when the market goes up and I don't was to feel upset when the market goes down. I will simply just keep saving and keep investing and over time, should do well. We all want to buy low but we don't know when 'low' will happen. Some people wait for a crash before investing and thus never end up in the market! Your cash just loses value. Once again, I think lumping it in and then saving what you can must be the optimal move. I personally have everything in Vanguard 80/20 plus have a bit in VWRL, and will work and save as much as I can. I probably will stick with that aa for 20 years but you might want to play it safer. Your costs and aa (and making sure you stick with it) will be your really important decisions.
synergy
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Re: I just invested a lump sum

Post by synergy »

Hi Cat,

I did not add to my taxable account in 2008. The main reason is that by the time we both maxed out our catch-up 401ks and maxed out our Roths, we did not have that much more to invest. If did have the cash, we would have put it somewhere though trying to remember exactly what I was thinking (except for having that sinking feeling) is beyond my recollection. I do remember that as the market began to rise, I thought long and hard about what percent I wanted to be at risk of another steep decline in equities. I have arrived at an approximately 65% fixed and 35% equity allocation. When I have some extra cash, I put it in a municipal bond fund but the additional amounts are not enough to affect my AA. I am close to retirement with enough invested to feel confident about the future since we live a frugal lifestyle but without any reasonable wants. If equities drop 50%, I lose 17.5%, a risk that we can accept and not enough to change our lives.

The 2008 market plunge was the first time that I had enough money invested in the market to be concerned. Going through such a decline was an invaluable lesson. I agree that worrying about how a market drop will affect your life is not fun and definitely has a negative affect on daily life. Now, I do check my Vanguard account, do a monthly update of my proposed retirement spreadsheet and scan this site to educate myself about best practices for withdrawal as I approach retirement. I feel that the only risk that I need to address is the risk of inflation over a hopefully long retirement. My suggestion for reducing stress is to only take the amount of risk that you need.

It does sound like you have made sound decisions and adjusting your AA to your comfort level, is a work in progress. You are doing great and monitoring this forum is a great investing education. All the best.
TRC
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Re: I just invested a lump sum

Post by TRC »

Congrat! Now get on with your life and don't check your account for a long time. You don't run out and check your grass height every day, right?
heyyou
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Re: I just invested a lump sum

Post by heyyou »

Cat, you did the right thing.

There is a Big Drop coming, there will always be a Big Drop coming for as long as there is a market. There will be New Highs in between some of the Big Drops, that too is normal for the market. As I remember, the market went down every time I bought four digits worth of stocks or bonds in the 1980s, but that worked well in retrospect, from today's view. It wasn't a smooth ride, nor will your ride be easy, but long term, you did the right thing.
Leeraar
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Re: I just invested a lump sum

Post by Leeraar »

cat5 wrote:Once again, I feel indebted to all of you who responded to me...

Synergy: Thank you for sharing your thoughts on the value of a good AA...I appreciate the importance of coming up with a solid financial plan and sticking with it. I believe I will have the courage to ride the waves. I want so much to be at peace concerning finances and to get on with my life. There are so many other things that I have to do and worrying about finances just puts a drag on the situation.

My question though is: did you add to your taxable account during 2008? I am concerned about having cash to buy more shares during a severe downturn. Maybe that is wrong thinking. When people say they plan to hold for 20+ years, does that mean without adding more money over that time? Or do they hold cash reserves for that purpose?

Thanks.
Cat
Cat,

Holding cash in anticipation of a downturn is not, I think, the way to approach it. You should be fully invested in your Asset Allocation, and use rebalancing to take advantage (if there is such a thing) of a market downturn.

Let's say you have $100,000 and your allocation is 70/30 stocks / bonds, &70,000 / $30,000. Stocks drop 40% in a short period, you now have $42,000 / $30,000. You rebalance back to 70/30 and you have $50,400 / $21,600. Stocks rebound to their previous level (dream on) and you now have $84,000 / $30,000. Not bad for riding the roller coaster!

While this is a made-up example, it is reflective of what happened to me around 2008. My portfolio returned to its pre-crash levels more than a year before any of the indexes did.

Holding cash for a downturn is a form of market timing, but worse, it requires you to make a bunch of subjective decisions. "What is a downturn?" Stocks drop 15%? Well, what if they drop 13.9%? By implication, there is a decision on the other side, what is an upturn? When do you take money off the table and hold it in cash for the next downturn? Rebalancing, on the other hand, can be set up as an objective decision: Maybe, rebalance if it means moving more than $5,000, in the above example.

That said, maintaining your AA is a technique to manage risk, not to profit from market fluctuations. The easiest way is simply to invest in a Vanguard LifeStrategy Fund with the appropriate AA and be done. I would recommend that LS Fund strategy even in a taxable account. Another way is to direct new investments to maintain your AA, and (in taxable accounts) to sweep distributions and dividends to cash and reinvest them manually to maintain your AA. If you do so, the need to actually buy and sell to rebalance will become a rare event.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
hiddensee
Posts: 419
Joined: Fri Feb 07, 2014 3:17 am

Re: I just invested a lump sum

Post by hiddensee »

Good work.
cat5 wrote:As I have said, I have put this off for a long time. But there is also pain in waiting for the Big Drop, looking at the stock market day after day wondering "Is this the day?" After reading your many thoughtful posts and listening to your kind encouragement to those of us who question when and how to add, what to us seems to be, a large sum, I decided I must take action. And so I did.
Now prepare yourself psychologically not to withdraw the money when The Big Drop does eventually come.
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