1 million to add to vanguard

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 9:22 am

I have 1 million to add to my vanguard account should i lump sum it in maybe spread it out over 10 monthly installment
I know people on here hate market timers but because of election uncertainty should i wait for a few big dips and jump in then?

am
Posts: 2777
Joined: Sun Sep 30, 2007 9:55 am

Re: 1 million to add to vanguard

Post by am » Tue Sep 27, 2016 9:26 am

I would invest asap. No ones knows where markets are going.

CoAndy
Posts: 531
Joined: Thu Jun 06, 2013 4:45 pm

Re: 1 million to add to vanguard

Post by CoAndy » Tue Sep 27, 2016 9:28 am

What are you going to use this money for? Retirement? Early retirement? Other?

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 9:30 am

retirement

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 9:31 am

i think market is kinda frothy trading at 18 times approx is the risk to downside?

Runner01
Posts: 290
Joined: Thu Dec 12, 2013 7:14 pm

Re: 1 million to add to vanguard

Post by Runner01 » Tue Sep 27, 2016 9:33 am

It's hard to say what the election will do to the markets. We could have a buy on the rumor, sell on the news situation where the market goes down regardless of the results. The market could also surge after the election regardless of who wins because that is one less uncertainty that the markets face.

barnaclebob
Posts: 3036
Joined: Thu Aug 09, 2012 10:54 am

Re: 1 million to add to vanguard

Post by barnaclebob » Tue Sep 27, 2016 9:35 am

What is this money currently invested in? Or is it sitting in a money market account? What % is it of your total investible assets.

Jack FFR1846
Posts: 7965
Joined: Tue Dec 31, 2013 7:05 am

Re: 1 million to add to vanguard

Post by Jack FFR1846 » Tue Sep 27, 2016 9:43 am

Whenever I get some big windfall (usually more like an unexpectedly good ESPP settlement), I wait until the money settles in my Schwab account. Then I buy immediately with all of it. The batteries in my crystal ball are all leaky and I can't get the stupid thing to start up, so that's what I do. I do plan to do more timing once I can figure out how to get the 1.21 jigawatts needed to start the Delorean, but I keep blowing fuses.
Bogle: Smart Beta is stupid

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 9:47 am

its about 1/5 of investible assets i dont need a crystal ball to see market multiple is high and that there is greater risk to downside i was think put 100,000 in a month then if there is big dip go in heavier
i did it the beginning of year bought 150,000 vti at 96.50 paid off each year seems have dips especially when market is sooo high

User avatar
randomizer
Posts: 1531
Joined: Sun Jul 06, 2014 3:46 pm

Re: 1 million to add to vanguard

Post by randomizer » Tue Sep 27, 2016 9:57 am

A very similar thread: viewtopic.php?p=3066721
87.5:12.5, EM tilt — HODL the course!

User avatar
David Jay
Posts: 5677
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: 1 million to add to vanguard

Post by David Jay » Tue Sep 27, 2016 10:00 am

Eric:

Put it into the market (according to your Asset Allocation plan) as quickly as you can get yourself to do it. If you can do it 1/3 at a time every month do it. If you need to put in 1/6 every month for 6 months, so be it.

The math is with sooner, rather than later. The reason to delay is emotional security. So take the best math that your emotional security can handle.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 10:09 am

ok read the thread and i see everyone is saying lump sum it in
so it doesnt matter how many times S&P is trading 18x is very high shouldnt that count in some way
So no matter what market conditions are at the moment just lump it in ok

wassabi
Posts: 422
Joined: Sun Feb 02, 2014 8:06 am

Re: 1 million to add to vanguard

Post by wassabi » Tue Sep 27, 2016 10:11 am

With $1M I would definitely dollar cost average over a year (at least). But that decision would suit me best given my risk tolerance, views on the current market, and financial profile.

Theoretical
Posts: 1425
Joined: Tue Aug 19, 2014 10:09 pm

Re: 1 million to add to vanguard

Post by Theoretical » Tue Sep 27, 2016 10:24 am

So it's 1/5 of your assets. How old are you?

If you're young (<40), then just plunk it all down. Time in the market will be the best, over the long run, and I suggest that you post your asset allocation on the personal investments side to get an idea where to target. A lot also depends on what the other 4 is invested in. People's answers will be very different if 3 million is in restricted company stock, for example.

If you're closer to retirement age, then splitting it 10 ways or whatever is possibly better by spreading out your risks.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 10:40 am

im a little over 40 basically my money is vanguard 60/40 split was just gonna add to it
but i really feel market is gonna take a big hit over next 6 months rising interest rates election etc
if VTI falls below 100 i could make a nice one time profit and odds are i think it might

User avatar
David Jay
Posts: 5677
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: 1 million to add to vanguard

Post by David Jay » Tue Sep 27, 2016 10:46 am

erik265 wrote:im a little over 40 basically my money is vanguard 60/40 split was just gonna add to it
but i really feel market is gonna take a big hit over next 6 months rising interest rates election etc
if VTI falls below 100 i could make a nice one time profit and odds are i think it might
But you have to DO IT. Waiting for VTI to fall below 100 is a bet against the house. Set a plan (X % every Y weeks) and get on with it. NOW.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 10:55 am

ok ok guess my reasoning is wrong if everyone disagrees with market being frothy at 18x multiple and rising rates i wont bet against the house look out 2300 S&P i better get in before i miss it :)
ill dump it in and forget it

User avatar
TomatoTomahto
Posts: 7651
Joined: Mon Apr 11, 2011 1:48 pm

Re: 1 million to add to vanguard

Post by TomatoTomahto » Tue Sep 27, 2016 11:04 am

erik265 wrote:ok ok guess my reasoning is wrong if everyone disagrees with market being frothy at 18x multiple and rising rates i wont bet against the house look out 2300 S&P i better get in before i miss it :)
ill dump it in and forget it
Yes. Every year, DW gets a big bonus. I take out an amount sufficient to cover taxes, tuition, room and board for the kids, and anything else we might be spending in the near future; that gets put in a MM. Everything else is invested according to our AA. I don't look back and see if I "coulda, woulda, shoulda" done something different.
Zero Net Carbon by 2019.

User avatar
prudent
Moderator
Posts: 5723
Joined: Fri May 20, 2011 2:50 pm

Re: 1 million to add to vanguard

Post by prudent » Tue Sep 27, 2016 11:12 am

Topic moved to Investing - Help with Personal Investments

victork
Posts: 107
Joined: Fri Jul 25, 2008 2:26 pm

Re: 1 million to add to vanguard

Post by victork » Tue Sep 27, 2016 11:15 am

Don't lose sight of the forest for the trees.

20 years ago, when I was investing, it seemed always true that I "should have" invested a week earlier, or a week later, to get a better price.
Now, when I redeem shares for my RMD, it again seems that there was a better price the week before, or the week after.

But the increase in the market over that time is much greater than the short term fluctuations. That's why we invest for retirement -- the long term increase. You're not buying now to sell in 3 or 4 months, but to sell after many years.

Whether you invest once, or 6 times, will probably not make a difference in the long run, and I don't think that it will affect your life.
So, do what's most comfortable for you. Sleep well at night.

Theoretical
Posts: 1425
Joined: Tue Aug 19, 2014 10:09 pm

Re: 1 million to add to vanguard

Post by Theoretical » Tue Sep 27, 2016 11:28 am

Based on that response, just dump it in according to your asset allocation. You're at a higher risk for behavioral errors here than you are for putting in at the top. Also, since this is most likely a taxable account, then you can potentially tax loss harvest if there's a drop, but stick to the AA.

The only exception I would say is that if you are carrying a lot of debt, you might use some of the money to deleverage yourself. Heck, at 5 MM at age 40, you've won the game, bigtime, especially if you're still working.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 12:05 pm

Im single i have no debt excpt mortgage on my Manhattan rental getting some income and appreciation i own my lexus hybrid i will be renting so i have really no other use for money but to invest
I feel in todays world the only real freedom is financial freedom

User avatar
Earl Lemongrab
Posts: 5654
Joined: Tue Jun 10, 2014 1:14 am

Re: 1 million to add to vanguard

Post by Earl Lemongrab » Tue Sep 27, 2016 12:16 pm

erik265 wrote:I have 1 million to add to my vanguard account should i lump sum it in maybe spread it out over 10 monthly installment
I know people on here hate market timers but because of election uncertainty should i wait for a few big dips and jump in then?
What would you do if there were no dips over the next year that brought things lower than now? Keep waiting? How long? There have been many points where the market reached a new all-time high AND the market has never been that low since.

Do you think that no one else is aware that an election is coming up?

Earl
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

User avatar
Earl Lemongrab
Posts: 5654
Joined: Tue Jun 10, 2014 1:14 am

Re: 1 million to add to vanguard

Post by Earl Lemongrab » Tue Sep 27, 2016 12:17 pm

ps: That amount can generate some nice brokerage bonus cash, but not at Vanguard.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

Grt2bOutdoors
Posts: 19310
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: 1 million to add to vanguard

Post by Grt2bOutdoors » Tue Sep 27, 2016 12:25 pm

erik265 wrote:ok ok guess my reasoning is wrong if everyone disagrees with market being frothy at 18x multiple and rising rates i wont bet against the house look out 2300 S&P i better get in before i miss it :)
ill dump it in and forget it
This is what I would do - put it all in Tax-Managed Balanced Index, if equities get frothier the manager automatically trims equities and buys bonds, if bonds become dear and equities cheap, they will sell bonds and purchase equities. In essence, you are timing the market, only the manager is doing the trading, but trading on a set formula, not a bunch of guesses about which way the market is going or not going.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Tue Sep 27, 2016 12:31 pm

was gonna do 60/40 split vti/bnd and some muni's
Keepin it simple

User avatar
Meg77
Posts: 2410
Joined: Fri May 22, 2009 1:09 pm
Location: Dallas, TX
Contact:

Re: 1 million to add to vanguard

Post by Meg77 » Tue Sep 27, 2016 2:35 pm

erik265 wrote:its about 1/5 of investible assets i dont need a crystal ball to see market multiple is high and that there is greater risk to downside i was think put 100,000 in a month then if there is big dip go in heavier
i did it the beginning of year bought 150,000 vti at 96.50 paid off each year seems have dips especially when market is sooo high
Since the amount is only 20% of your investments it's not as big of a deal. But I might DCA over 6 months just to hedge against the possibility of investing right before a correction. Statistically investing the lump will make you come out ahead, but only about 65% of the time if I remember correctly (and depending on which study over which time periods you read). I wouldn't spread it out over longer than a year for sure though.
"An investment in knowledge pays the best interest." - Benjamin Franklin

Theoretical
Posts: 1425
Joined: Tue Aug 19, 2014 10:09 pm

Re: 1 million to add to vanguard

Post by Theoretical » Tue Sep 27, 2016 4:53 pm

erik265 wrote:was gonna do 60/40 split vti/bnd and some muni's
Keepin it simple
Are you consciously choosing not to invest in or consider international stocks, or does the current 4 include international?

Tal-
Posts: 358
Joined: Fri Apr 22, 2016 10:41 pm

Re: 1 million to add to vanguard

Post by Tal- » Tue Sep 27, 2016 5:26 pm

Tal votes to just put it in.

If this was your only money, and you were worried about your personal security, I would be open to a DCA conversation. But, with this being 20% of your assets, that's not a concern. It feels like the real question you're wondering if you should pull investable money out of stocks, and into something more safe. That's a fine question to ask, but it's an AA question, and not a DCA question.

So, I encourage you take a step back, and ask yourself some investing philosophy questions. If you would like to vary your stock/bond allocation by x%, from a 60/40 ratio, based on the S&P's PE ratio, that's a thesis that is worth researching. But, even if you investigate this and determining that this is truly your strategy, I'd argue that DCA is not the right means to get you there.
Debt is to personal finance as a knife is to cooking.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Wed Sep 28, 2016 3:49 am

Are you consciously choosing not to invest in or consider international stocks, or does the current 4 include international?

International is a tricky question i have heard arguments for and against it on here i think in the long run say over next 20 years International may smooth out portfolio a little bit but i just dont see japan UK canada france germany outperforming the USA in long run China is a wild card great potential but very volatile low transparancy etc . Right now Europe is better valued than usa so over next few years may outperform but over long run probably not. I think thats buffet and bogle's rational for staying domestic as well Also large usa companies are heavily exposed to international markets so there is more international correlation today and going forward-- so vti has international exposure oh currency risk too If i lived in UK or canada i think home bias would be a problem i would def have much more international exposure the only country that home bias probably works is USA
Be that as it may i am approx 10% in VXUS so i may allocate accordingly just very on the fence prob in the end whether im 10% in vxus or not at all wont make much of a difference

VXUS top holdings
Japan 17.5%
United Kingdom 13.6%
Canada 6.8%
France 6.0%
Germany 6.1%
Switzerland 6.0%
Australia 5.1%
China 4.7%
Korea 3.5%
Taiwan 3.1%
Hong Kong 2.6%
India 2.4%
Netherlands 2.2%
Spain 2.1%
Sweden 2.1%
Brazil 1.7%
Italy 1.5%
South Africa 1.5%
Denmark 1.3%
Belgium 1.0%
Singapore 1.0%
Last edited by erik265 on Wed Sep 28, 2016 4:26 am, edited 2 times in total.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Wed Sep 28, 2016 3:54 am

Since the amount is only 20% of your investments it's not as big of a deal. But I might DCA over 6 months just to hedge against the possibility of investing right before a correction. Statistically investing the lump will make you come out ahead, but only about 65% of the time if I remember correctly (and depending on which study over which time periods you read). I wouldn't spread it out over longer than a year for sure though.

I think you have to look at market conditions i bet the 65% lump sum would not apply when market is valued at over 18x
thats prob an average of 100 years when average market trades at 15x

I am a true believer in reversion to the mean
Last edited by erik265 on Wed Sep 28, 2016 4:01 am, edited 1 time in total.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Wed Sep 28, 2016 3:59 am

So, I encourage you take a step back, and ask yourself some investing philosophy questions. If you would like to vary your stock/bond allocation by x%, from a 60/40 ratio, based on the S&P's PE ratio, that's a thesis that is worth researching. But, even if you investigate this and determining that this is truly your strategy, I'd argue that DCA is not the right means to get you there.

Its really not about AA its really investing based on market conditions via DCA and market timing based on those conditions
Money would just sit in Vanguard money market then be moved over using a combination of DCA and i know terrible words market timing based on valuations Highly valued markets with with interest rates rising soon in low growth are ripe for big fluctuations Wont take much bad news for a 10% or more pull back

PS bonds will be immediately allocated no reason to dCA those fluctuations are minimal though might have some extra movement this time because of rising interest rates looming hmmm

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Wed Sep 28, 2016 4:16 am

One last thing over long long run even if i play this out perfect and get in on strong pull back how much will it really effect my performance over 20 years Maybe fractionally
But you know what i still woundnt mind an extra 60 grand in my pocket if this plays out well :)

Jags4186
Posts: 2541
Joined: Wed Jun 18, 2014 7:12 pm

Re: 1 million to add to vanguard

Post by Jags4186 » Wed Sep 28, 2016 6:27 am

I vote invest everything today. The chance of investing right before a correction is the same now as it is in 6 or 10 months from now. Even worse, if you decide to invest 100k a month and then in month 3 there is a 50% crash you might deviate from your plan. Many people got out of the market in 2008/2009 and still haven't reentered. Don't be that person.

User avatar
tennisplyr
Posts: 1851
Joined: Tue Jan 28, 2014 1:53 pm
Location: Sarasota, FL

Re: 1 million to add to vanguard

Post by tennisplyr » Wed Sep 28, 2016 7:38 am

Grt2bOutdoors wrote:
erik265 wrote:ok ok guess my reasoning is wrong if everyone disagrees with market being frothy at 18x multiple and rising rates i wont bet against the house look out 2300 S&P i better get in before i miss it :)
ill dump it in and forget it
This is what I would do - put it all in Tax-Managed Balanced Index, if equities get frothier the manager automatically trims equities and buys bonds, if bonds become dear and equities cheap, they will sell bonds and purchase equities. In essence, you are timing the market, only the manager is doing the trading, but trading on a set formula, not a bunch of guesses about which way the market is going or not going.
+1. Am in a slightly similar situation and am doing this.
Those who move forward with a happy spirit will find that things always work out.

jjface
Posts: 2570
Joined: Thu Mar 19, 2015 6:18 pm

Re: 1 million to add to vanguard

Post by jjface » Wed Sep 28, 2016 9:42 am

It makes no sense not to put it in. Are you going to pull the rest of your stocks out too because of your fears ?

So you have $5m and want to be 60:40. So that is 3m in stocks. Perhaps that is too much for your risk appetite. Perhaps moving to 50:50 makes more sense. That way you are not putting it all into the stock market anyway since you are looking at $2.5m stocks.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Wed Sep 28, 2016 10:06 am

we are just talking about the 1 million the rest is already allocated

Longtermgrowth
Posts: 557
Joined: Thu Nov 26, 2015 1:59 pm

Re: 1 million to add to vanguard

Post by Longtermgrowth » Wed Sep 28, 2016 11:00 am

Forgive me if it was already mentioned and I didn't notice, but another consideration is the need to take risk. Does the passive income from 5mm exceed your living expenses? Everyone's need and ability to take risk is different, but with the other 80% already at 60/40, I would probably be looking more for principal preservation with this 20%.

jjface
Posts: 2570
Joined: Thu Mar 19, 2015 6:18 pm

Re: 1 million to add to vanguard

Post by jjface » Wed Sep 28, 2016 11:07 am

erik265 wrote:we are just talking about the 1 million the rest is already allocated
If you don't want to invest now then why not unallocate the rest too The stocks you already own will crash just as hard as your new money.

If you are happy with your current allocation for $4m but cannot stomach adding more stocks then you are not comfortable with 60:40 with the full $5m. Move to 50:50 overall which means adding 100k to stocks and 900k to bonds now. Which seems about how much risk you want to take.

Dandy
Posts: 5406
Joined: Sun Apr 25, 2010 7:42 pm

Re: 1 million to add to vanguard

Post by Dandy » Wed Sep 28, 2016 11:10 am

When equity markets are at or near their highs I would do some lump and some automated Dollar Cost Averaging. If the equity markets were well off their market highs I would do more lump some and less DCA. This assumes you have a long term horizon.

So, in today's market I would probably do 30-50% lump and DCA the rest over a year or so. If the equities dropped significantly I would double up on that month's DCA. So in probably less than a year you will be fully invested.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Wed Sep 28, 2016 1:58 pm

again this is long term i am not very concerned with risk ofcourse to get return u need to take risk 60/40 or 50/50 allocation isnt that much of a difference if market tanks

User avatar
ogd
Posts: 4854
Joined: Thu Jun 14, 2012 11:43 pm

Re: 1 million to add to vanguard

Post by ogd » Wed Sep 28, 2016 2:40 pm

erik265 wrote:ok read the thread and i see everyone is saying lump sum it in
so it doesnt matter how many times S&P is trading 18x is very high shouldnt that count in some way
So no matter what market conditions are at the moment just lump it in ok
Erik: please understand that market timing is extremely hard. So hard that professional managers with an explicit mission to do this, and great resources at their disposal (computers, economists, etc) underperform a simple static allocation pretty badly: performance of tactical allocation funds. Vanguard's "quantitatively driven" market timing fund was so bad that years later we still have to make excuses for its effect on the LifeStrategy funds that used to include it at 10-20%. For the little guy, it's basically impossible.

On the more amateurish side of things, take a look at the kinds of things that so-called "technical analysis", i.e. extrapolating trajectories of the market, has come up with: technical analysis glossary; I'm a sarcastic fan of the "Bearish Abandoned Baby", myself. Don't you think that if "market is frothy" worked it would be the only entry in that glossary?

Market timing is a losing proposition, whether for new money or old. Not only does it cost you time in the market, which for all you reasonably know is a fairly steep cost, but it's an active strategy and like all such, the average small investor has a habit of abandoning it only after losses (or missed opportunities); that is, taking the negative outcomes more frequently than the positive ones. For example, your strategy might work once or be neutral, you'd find this encouraging, then keep doing it until large losses convince you otherwise. These behaviours cost investors multiple percentage points of return compared to the very funds they are investing in.

The Boglehead way (and one I've found only after dabbling in all the bad stuff) is to abandon all pretense you know anything about the market, put the money in an allocation you can live with, and go do something productive with your time and skills. It's actually quite liberating.

erik265
Posts: 172
Joined: Sat Dec 05, 2015 8:55 am

Re: 1 million to add to vanguard

Post by erik265 » Wed Sep 28, 2016 3:29 pm

I understand what you are saying:
I am not a trader-- here and there i have a lump sum to invest
im not trying to beat the market i am just trying to utilize general conditions to make best educated guess
i am still gonna DCA each month if one month tanks then ill average more in if not i just keep DCA i just dont see how i can really get hurt with that strategy I see no real downside
Let me know your thoughts

dspencer
Posts: 147
Joined: Wed Jul 06, 2016 11:29 am

Re: 1 million to add to vanguard

Post by dspencer » Wed Sep 28, 2016 4:41 pm

erik265 wrote:I have 1 million to add to my vanguard account should i lump sum it in maybe spread it out over 10 monthly installment
I know people on here hate market timers but because of election uncertainty should i wait for a few big dips and jump in then?
Other people have touched on it, but I would ask yourselves these questions:

1. If you currently had $1 million dollars in your preferred asset allocation that you had invested 5 years ago, would you decide to sell it now and then reinvest over the next 10 months?
2. If you invest in monthly installments for 10 months and at the end the market looks exactly the same to you, will you sell everything and repeat the process?
3. Do you really believe in buy and hold?

I think we all wrestle with the same doubts. Doesn't the market look frothy? We must be overdue for a correction, right?

The reality is it probably won't make much difference either way, but logically if you believe you can't know what the market is going to do, you should invest it all now. Otherwise you might as well just embrace being a market timer forever. If so, let us know how it goes!

User avatar
Earl Lemongrab
Posts: 5654
Joined: Tue Jun 10, 2014 1:14 am

Re: 1 million to add to vanguard

Post by Earl Lemongrab » Wed Sep 28, 2016 8:20 pm

erik265 wrote:I think you have to look at market conditions i bet the 65% lump sum would not apply when market is valued at over 18x thats prob an average of 100 years when average market trades at 15x
In that case, everyone should be selling to a lump sum and doing DCA.

Earl
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

CajunDan
Posts: 124
Joined: Wed Jul 13, 2016 11:47 pm

Re: 1 million to add to vanguard

Post by CajunDan » Wed Sep 28, 2016 8:29 pm

erik265 wrote:I have 1 million to add to my vanguard account should i lump sum it in maybe spread it out over 10 monthly installment
I know people on here hate market timers but because of election uncertainty should i wait for a few big dips and jump in then?
Lump sum is higher risk and higher reward. Dollar cost averaging (spreading it out) is lower risk and lower reward. Bernstein explains this is detail in one of his books, forgot which one, but you can prove it to yourself with Portfolio Visualizer.

jpm06
Posts: 3
Joined: Wed May 25, 2016 8:03 am

Re: 1 million to add to vanguard

Post by jpm06 » Wed Sep 28, 2016 8:46 pm

Not sure if this was already mentioned - but by not investing sooner you are missing out on dividend payments

bartab2002
Posts: 2
Joined: Wed Sep 28, 2016 8:43 pm

Re: 1 million to add to vanguard

Post by bartab2002 » Wed Sep 28, 2016 8:50 pm

My wife received an ESOP distribution and invested it all at one time. It was 10/26/07. At this time, there is no way that I would do that again.

209south
Posts: 473
Joined: Mon Jan 28, 2013 10:58 pm

Re: 1 million to add to vanguard

Post by 209south » Wed Sep 28, 2016 8:51 pm

I'm a dollar-cost-averaging guy, based on the experience of my (then) 18 year-old daughter with a meaningful one-time gift...this was mid-2008 and my advice was to invest immediately as that would generally lead to better results. Given her age she went 100% TSM and got obliterated...good news is she sold nothing and has recovered, bad news is she was scarred for life and is afraid of the market to this day. If $1mm is only 20% of your investable assets you presumably have some level of sophistication and the ability to survive a substantial loss, but I think the marginal benefit of being fully invested asap is offset by the risk of regret.

User avatar
Toons
Posts: 13016
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: 1 million to add to vanguard

Post by Toons » Wed Sep 28, 2016 9:04 pm

Easy.
All In.
Time.
Not Timing







8-)
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Post Reply