When to start investing again?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Zillions
Posts: 93
Joined: Sun May 24, 2020 12:58 am

When to start investing again?

Post by Zillions » Sun May 24, 2020 5:07 pm

In January, I moved 350K of my small $500K nest egg to cash. I missed out on the subsequent highs of Feb 2020 and the buying opportunity in March 2020.

Of the 150K, 50K is invested in Fidelity sector mutual funds, and the rest in around 5 - 6 shares each of blue chip & health care stocks.

I am now wondering if I should move back into investments again but the market is really high which worries me. I am new to Bogleheads and want to do the 3-fund portfolio and index funds from now on, as opposed to sector funds or individual stocks. Should I dollar cost average my way back in? If so, how often and how much each time?

Please advice?

scubadiver
Posts: 1193
Joined: Sun May 04, 2008 9:48 pm

Re: When to start investing again?

Post by scubadiver » Sun May 24, 2020 5:14 pm

Welcome to the forum!

The first issue you need to address is determining your desired asset allocation. Your post and the details concerning your recent investment history leads me to think you are risk averse. If correct, this would tend to favor a more conservative allocation irrespective of your investment timeline.

In any event, you should lump sum invest once you have determined your desired asset allocation.

Cheers,
Scubadiver

retired@50
Posts: 3049
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: When to start investing again?

Post by retired@50 » Sun May 24, 2020 5:17 pm

Zillions wrote:
Sun May 24, 2020 5:07 pm
In January, I moved 350K of my small $500K nest egg to cash. I missed out on the subsequent highs of Feb 2020 and the buying opportunity in March 2020.

Of the 150K, 50K is invested in Fidelity sector mutual funds, and the rest in around 5 - 6 shares each of blue chip & health care stocks.

I am now wondering if I should move back into investments again but the market is really high which worries me. I am new to Bogleheads and want to do the 3-fund portfolio and index funds from now on, as opposed to sector funds or individual stocks. Should I dollar cost average my way back in? If so, how often and how much each time?

Please advice?
It would appear that you haven't completely settled on an asset allocation you can live with. I'd suggest you spend some time reading the Boglehead wiki and do some thinking about what type of investing plan you think you can stick with long term.

https://www.bogleheads.org/wiki/Getting_started

https://www.bogleheads.org/wiki/Asset_allocation

https://www.bogleheads.org/wiki/Boglehe ... philosophy

Regards,
This is one person's opinion. Nothing more.

User avatar
FrankTheViking
Posts: 97
Joined: Wed Jan 08, 2020 3:44 pm

Re: When to start investing again?

Post by FrankTheViking » Sun May 24, 2020 5:21 pm

As others have said revisit asset allocation if your portfolio spooks you that much.
Reposting a post I recently made in another thread as far as when to reinvest.

If I received a windfall today so to speak I would go all in now. If I were to try and help you time the market I don't know. Personally I think the markets going to tank further over the next 6 months / year so I guess wait until it seems safe. Don't know how long that will be..... it likely will never be. Security is an illusion, with stocks it's non-existent.
No EF. 80% Total U.S. / 20% Total International. 100% equity. Is there a gun to your head? Is there a tiger in the room? No? What's the problem?

lakpr
Posts: 5403
Joined: Fri Mar 18, 2011 9:59 am

Re: When to start investing again?

Post by lakpr » Sun May 24, 2020 5:28 pm

The standard advice from Bogleheads is to ignore what the market is doing, and invest everything at once. If you are not able to do that, then get back into the market (dollar-cost average) over no more than 1 year. The motto is "Yesterday was a good day, but today is the best day to invest" (I am paraphrasing, not the exact quote)

User avatar
celia
Posts: 10840
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: When to start investing again?

Post by celia » Sun May 24, 2020 5:38 pm

Before you start investing again, I'd suggest putting all your statements away and temporarily forget about what you own. Then write out YOUR Investment Policy Statement (IPS). This is the road map that defines YOUR goals and how you are going to get there. When things go sour or uncertain, you should first refer to it before you make any big moves to see what you were thinking in calmer days. Buying or selling in a panic can take you further from your goals.

After you have your plan, you then figure out how to get from where you are (your current holdings, realized gains/losses for the year) to your new holdings. Note that selling incurs gains/losses in taxable accounts, so you need to be aware of what taxable gains/losses you already took for this year before you incur more of them.

If you think you first need to do more reading, let us know what you've already read and if there is something specific you need to know. Note that the "Amazon" link at the top of each forum page takes you to a suggested reading list. You can find many of these books at the library (if they are open). (If you purchase them at Amazon after going through the link, the forum will get a small donation from Amazon.)

maxInfo
Posts: 10
Joined: Wed May 20, 2020 11:10 pm

Re: When to start investing again?

Post by maxInfo » Sun May 24, 2020 5:52 pm

No, it's indicative of refusing to pay a high price for a very uncertain stream of future cash flows. Your man Bogle did the exact same same thing during the internet bubble.

mortfree
Posts: 2330
Joined: Mon Sep 12, 2016 7:06 pm

Re: When to start investing again?

Post by mortfree » Sun May 24, 2020 6:03 pm

Tuesday. Definitely Tuesday.

Ed 2
Posts: 1600
Joined: Sat May 15, 2010 9:34 am

Re: When to start investing again?

Post by Ed 2 » Sun May 24, 2020 6:09 pm

Zillions wrote:
Sun May 24, 2020 5:07 pm
In January, I moved 350K of my small $500K nest egg to cash. I missed out on the subsequent highs of Feb 2020 and the buying opportunity in March 2020.

Of the 150K, 50K is invested in Fidelity sector mutual funds, and the rest in around 5 - 6 shares each of blue chip & health care stocks.

I am now wondering if I should move back into investments again but the market is really high which worries me. I am new to Bogleheads and want to do the 3-fund portfolio and index funds from now on, as opposed to sector funds or individual stocks. Should I dollar cost average my way back in? If so, how often and how much each time?

Please advice?
First go to this site https://www.bogleheads.org/wiki/Asking_ ... _questions. It will be easier to help you knowing your overall situation.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel

User avatar
LadyGeek
Site Admin
Posts: 63994
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: When to start investing again?

Post by LadyGeek » Sun May 24, 2020 6:45 pm

I removed an off-topic post and several replies. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.
Additionally, please stay on-topic to help the OP.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
galawdawg
Posts: 847
Joined: Thu Dec 14, 2017 12:59 pm
Location: Georgia

Re: When to start investing again?

Post by galawdawg » Sun May 24, 2020 6:55 pm

Welcome to Bogleheads. Lot's of good advice from folks here. My summary for a basic starting point to put your money back to work for you:

1. To directly respond to your question first, just invest your funds all at once to implement your investment plan. But before you do that, I'd recommend the following:
2. Decide what asset allocation you are comfortable with based upon your ability to take risk, your willingness to take risk and your need to take risk. Read the Bogleheads wiki on asset allocation: https://www.bogleheads.org/wiki/Asset_allocation
3. Once you have decided upon an asset allocation appropriate to your personal individual circumstances, invest in a low-cost two or three fund portfolio (https://www.bogleheads.org/wiki/Two-fund_portfolio and https://www.bogleheads.org/wiki/Three-fund_portfolio) according to that asset allocation. Put your money back to work.
4. Then STAY THE COURSE. Do NOT buy or sell based upon what anyone on television tells you. Nobody knows anything about future market performance. Don't panic. Don't make investment decisions based upon emotion or fear. If you cannot STAY THE COURSE, then your asset allocation is not right for you and you need to study again how to set an appropriate asset allocation and revisit whether you need to adjust.
5. Buy and sell only as necessary to maintain your desired asset allocation. Here is the Bogleheads wiki on rebalancing: https://www.bogleheads.org/wiki/Rebalancing

Continue to read and post questions here and folks will be happy to point you in the right direction or at least attempt to talk you off the ledge!

Good luck.

deltaneutral83
Posts: 1634
Joined: Tue Mar 07, 2017 4:25 pm

Re: When to start investing again?

Post by deltaneutral83 » Sun May 24, 2020 8:51 pm

OP, you are one of the lucky ones, you have completed the first half of successful market timing. You can complete this by figuring out your true asset allocation and executing a buy order first thing Tuesday morning and lock in a very sizable gain. Even if you sold at the lows in Jan the S&P is 8% below that. The odds are not in your favor if you continue to wait.

Post Reply