Buy today or stick to plan?

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Crow Hunter
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Buy today or stick to plan?

Post by Crow Hunter » Thu Sep 25, 2014 1:05 pm

My normal plan is that I buy shares in my taxable account per my AA on the first of every month with the accumulated dividends from the previous month to limit the number of cost basis points to keep up with.

Right now I am sitting on ~$750 in my sweep account from Quarterly dividends earlier this month.

Total International Stock Market (my taxable account fund) is down today by nearly 2%. I am having the urge to go ahead and buy it with what I have now and buy more when the other dividends show up at the end of the month. (Probably ~$500 more)

Stick with the plan or take this as a buying opportunity?

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cfs
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Re: Buy today or stick to plan?

Post by cfs » Thu Sep 25, 2014 1:17 pm

The question to be asked.

The question to be asked to those planning to buy today because it is down today by nearly 2%--Are you going to feel okay tomorrow if it drops another 2%?
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iceman
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Re: Buy today or stick to plan?

Post by iceman » Thu Sep 25, 2014 1:22 pm

You want to buy today because the price is down 2% compared to yesterday. But that's irrelevant - what you really need to know is what the price today is compared to the price on 10/1. You can't know that. I would stick to your plan.

origami
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Re: Buy today or stick to plan?

Post by origami » Thu Sep 25, 2014 1:23 pm

Honestly, with the amounts like that and one week difference it just doesn't matter.
Know why you're doing what you're doing, don't try to time the market, and keep investments long term.

crake
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Re: Buy today or stick to plan?

Post by crake » Thu Sep 25, 2014 1:24 pm

Short answer is it doesn't matter so just stick with your plan. 750 dollars will most likely have no noticeable effect on your savings.

Longer answer is your better off contributing today but not for the reason you're thinking. Time in the market, not timing the market. The sooner you reinvest dividends the more time they have to grow and compound. It doesn't matter if today is a bad day because tomorrow and the next can be even worse days and you have no way of knowing that.

sramina
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Re: Buy today or stick to plan?

Post by sramina » Thu Sep 25, 2014 1:29 pm

Buy the 750 now and the 500 dollars later. If it goes up between now and then, be glad you contributed the 750 while it was down. If it goes down between now and then, be glad you have the 500 dollars still to invest. Keep in the back of your mind that it really won't affect your long-term strategy too much as it is a small amount of money and likely a small difference in prices.

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kingsnake
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Re: Buy today or stick to plan?

Post by kingsnake » Thu Sep 25, 2014 1:33 pm

I bought $3500 of VTSAX today and $3000 VTIAX today---that's a vote for buy today
Last edited by kingsnake on Thu Sep 25, 2014 1:42 pm, edited 1 time in total.

Crow Hunter
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Re: Buy today or stick to plan?

Post by Crow Hunter » Thu Sep 25, 2014 1:40 pm

sramina wrote:Buy the 750 now and the 500 dollars later. If it goes up between now and then, be glad you contributed the 750 while it was down. If it goes down between now and then, be glad you have the 500 dollars still to invest. Keep in the back of your mind that it really won't affect your long-term strategy too much as it is a small amount of money and likely a small difference in prices.


This is kind of what I was thinking but I wanted to see what the consensus was from the Borg.

Crow Hunter
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Re: Buy today or stick to plan?

Post by Crow Hunter » Thu Sep 25, 2014 1:43 pm

cfs wrote:The question to be asked.

The question to be asked to those planning to buy today because it is down today by nearly 2%--Are you going to feel okay tomorrow if it drops another 2%?


I would be.

I would feel less good though if I didn't buy today and it went higher when I bought next Wednesday.

It is also partly a question about whether I should be waiting to invest at the beginning of every month or should I just invest it as I get it like I do in my tax advantaged accounts?

livesoft
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Re: Buy today or stick to plan?

Post by livesoft » Thu Sep 25, 2014 1:51 pm

Today is a much better day to buy than yesterday was, so if you have the money and want to buy, you should do so.
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ww340
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Re: Buy today or stick to plan?

Post by ww340 » Thu Sep 25, 2014 1:55 pm

I just bought a little VTSAX also. I am on a DCA plan, but I do take advantage of some market dips to add a little extra.

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ivyhedge
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Re: Buy today or stick to plan?

Post by ivyhedge » Thu Sep 25, 2014 1:56 pm

I bought today.

If you find that you often wish to make purchases on down days outside of your target date of the month's first business day, perhaps you ought to revisit the thought process that generated that internal requirement.

If you don't, buy (or perhaps define this exception as $~600 now + ~$600 on 1 October). :wink:
Polymath.

Crow Hunter
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Re: Buy today or stick to plan?

Post by Crow Hunter » Thu Sep 25, 2014 3:03 pm

Unfortunately, I got called into a meeting that just let out, so the question is now a moot point. :oops:

Maybe it will be down more tomorrow. :D

But to my secondary question, is it better to just invest it as I get it or hold it and invest once per month in a taxable account?

livesoft
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Re: Buy today or stick to plan?

Post by livesoft » Thu Sep 25, 2014 3:39 pm

Who knows what will be better without predicting the future? However, I would suggest buying on days when the markets drop enough (see RBD threads) if one is holding cash to buy within the next month. Once again: At least you know you did not buy yesterday.
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cfs
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Re: Buy today or stick to plan?

Post by cfs » Thu Sep 25, 2014 3:52 pm

Crow Hunter wrote:
cfs wrote:The question to be asked.

The question to be asked to those planning to buy today because it is down today by nearly 2%--Are you going to feel okay tomorrow if it drops another 2%?


I would be.

I would feel less good though if I didn't buy today and it went higher when I bought next Wednesday.

It is also partly a question about whether I should be waiting to invest at the beginning of every month or should I just invest it as I get it like I do in my tax advantaged accounts?

In my opinion, do it as soon as you get it, like in the tax advantaged account. Now, on this side of the keyboard we invest every other Thursday [on payday] on the taxable and on 401k accounts. Today is payday and today is our investing day.
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pkcrafter
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Re: Buy today or stick to plan?

Post by pkcrafter » Thu Sep 25, 2014 4:29 pm

How do you know the market went down today? Bogleheads do not watch the market every day.

Paul
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.

Rich11111
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Re: Buy today or stick to plan?

Post by Rich11111 » Thu Sep 25, 2014 4:42 pm

I would think that sticking with your plan is important and dollar cost averaging will have the fix built in. I have read that market prices are up at the end and start of month so I would invest perhaps later in the month routinely to get the cost averaging I do want to point out that I have less than 10 post (newbie) :)

placeholder
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Re: Buy today or stick to plan?

Post by placeholder » Thu Sep 25, 2014 5:51 pm

pkcrafter wrote:How do you know the market went down today? Bogleheads do not watch the market every day.

That's no true Boglehead watches the market every day.

z3r0c00l
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Re: Buy today or stick to plan?

Post by z3r0c00l » Thu Sep 25, 2014 6:04 pm

Going a bit early on a RBD doesn't do much harm directly, but if it causes you to slip further and further from the investment plan, and causes you to time the market more and more, it is a problem.

Crow Hunter
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Re: Buy today or stick to plan?

Post by Crow Hunter » Thu Sep 25, 2014 6:10 pm

placeholder wrote:
pkcrafter wrote:How do you know the market went down today? Bogleheads do not watch the market every day.

That's no true Boglehead watches the market every day.


I wasn't actually watching the market.

I saw a post about "We are all going to die" and saw that the S&P had dropped so out of curiosity I checked the ETF for Total International to see if it was zigging while the S&P was zagging and it had also dropped, actually more at the time I looked at it. I knew that I had that money sitting in my sweep account because I had also read in another thread that Vanguard had posted its 3rd Quarter distributions and I checked to see how much I had gotten.

So true Bogleheads don't click on threads on Bogleheads.org or only certain ones? :D

Also, when I set up my taxable account (3 months ago) I had read, also on Bogleheads.org that it was best to group your taxable purchases into as few as possible to limit the amount of cost basis transactions as possible, but I had also read threads where people stated that it was important to invest as much as possible as early as possible.

This was the first time that I had ever had the option to do it differently. Normally I get monthly distributions from MBS and my Muni fund which all occur at the end of the month and that was how I wrote my investing plan.

I was conflicted about what I should do so I sought guidance from those with more experience than I.

madbrain
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Re: Buy today or stick to plan?

Post by madbrain » Thu Sep 25, 2014 6:15 pm

I will check my asset allocation tonight when mutual funds prices are all updated, and if anything off by 5%, I will do some rebalancing.
So far I haven't bought any stocks all year and the AA is still not out of whack.

placeholder
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Re: Buy today or stick to plan?

Post by placeholder » Thu Sep 25, 2014 7:18 pm

Crow Hunter wrote:
placeholder wrote:That's no true Boglehead watches the market every day.


I wasn't actually watching the market.

That was joky callback to another thread.

Funkey
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Re: Buy today or stick to plan?

Post by Funkey » Thu Sep 25, 2014 8:33 pm

Crow Hunter wrote:
sramina wrote:
This is kind of what I was thinking but I wanted to see what the consensus was from the Borg.


My God is this the Borg?

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joe8d
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Re: Buy today or stick to plan?

Post by joe8d » Thu Sep 25, 2014 8:42 pm

pkcrafter wrote:How do you know the market went down today? Bogleheads do not watch the market every day.

Paul


I do :happy
All the Best, | Joe

Crow Hunter
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Re: Buy today or stick to plan?

Post by Crow Hunter » Thu Sep 25, 2014 8:47 pm

Funkey wrote:
Crow Hunter wrote:
sramina wrote:
This is kind of what I was thinking but I wanted to see what the consensus was from the Borg.


My God is this the Borg?


Yes.

The collective wisdom of Bogleheads.org.

Shortened by some to BH.org.

Shortened further to B.org. Now you see the truth and realize that your resistance is futile.

You will be assimilated.

:D

placeholder
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Re: Buy today or stick to plan?

Post by placeholder » Thu Sep 25, 2014 11:52 pm

Funkey wrote:My God is this the Borg?

You're fully assimilated when you don't remember being assimilated.

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pjstack
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Re: Buy today or stick to plan?

Post by pjstack » Fri Sep 26, 2014 12:28 am

Funkey wrote:
Crow Hunter wrote:
sramina wrote:
This is kind of what I was thinking but I wanted to see what the consensus was from the Borg.


My God is this the Borg?

Resistance is futile!
pjstack

Pizzasteve510
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Re: Buy today or stick to plan?

Post by Pizzasteve510 » Fri Sep 26, 2014 12:38 am

If I can be 6 of 9 count me in. yumm! 7 in the next door recharge cylinder.

kazper
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Re: Buy today or stick to plan?

Post by kazper » Fri Sep 26, 2014 4:17 am

cfs wrote:The question to be asked.

The question to be asked to those planning to buy today because it is down today by nearly 2%--Are you going to feel okay tomorrow if it drops another 2%?


Exactly. While it may seem like a better deal today than it did yesterday (more shares for the same price), you may feel silly when in two weeks you could have bought three times as many shares for the same price. Probably not, but you get my point! But if you feel the overpowering need to buy a few days early, I highly doubt it will throw your whole investing life out of whack, especially with dca.

J295
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Re: Buy today or stick to plan?

Post by J295 » Fri Sep 26, 2014 8:38 pm

Stick to your plan.
If you no longer believe in your plan, then change your plan.
Personally, our IPS only permits a plan change if we decide on the change and then wait three months and still then desire to make the plan change.
Enjoy the weekend.

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