I accidentally went into cash yesterday. What to do now?

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Blue456
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I accidentally went into cash yesterday. What to do now?

Post by Blue456 »

Yesterday I sold my VOO ETF with small gains so that I could purchase mutual fund. But it was too late :oops: and market was closed already. Now US stocks are dropping. What should I do? Purchase VFIAX today at or wait and if so for how long. My IPS does not address this issue.

EDIT: VFIAX is set in automatic purchase at the end of the day.

EDIT 2: Annoyed. It looks like the safe of VOO has completed but the cash is not settled. So in effect today VFIAX was not purchased. I guess I have to wait for money to settle. God knows how long this takes.
Last edited by Blue456 on Thu Sep 03, 2020 5:43 pm, edited 2 times in total.
000
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Re: I accidentally went into cash yesterday. What to do now?

Post by 000 »

I personally would buy right now.
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unclescrooge
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Re: I accidentally went into cash yesterday. What to do now?

Post by unclescrooge »

Why would you sell an ETF to buy an equivalent mutual fund?
whereskyle
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Re: I accidentally went into cash yesterday. What to do now?

Post by whereskyle »

Blue456 wrote: Thu Sep 03, 2020 12:02 pm Yesterday I sold my VOO ETF with small gains so that I could purchase mutual fund. But it was too late :oops: and market was closed already. Now US stocks are dropping. What should I do? Purchase VFIAX today at or wait and if so for how long. My IPS does not address this issue.
I did not sell yesterday.

I have been buying all day, and my order is in to buy at close.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
livesoft
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Re: I accidentally went into cash yesterday. What to do now?

Post by livesoft »

Today is a better day to buy equities than yesterday, so I do not see what the issue is. What is the issue again?
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sailaway
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Re: I accidentally went into cash yesterday. What to do now?

Post by sailaway »

Oh no, you sold high and already have an opportunity to buy lower!
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arcticpineapplecorp.
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Re: I accidentally went into cash yesterday. What to do now?

Post by arcticpineapplecorp. »

livesoft wrote: Thu Sep 03, 2020 12:07 pm Today is a better day to buy equities than yesterday, so I do not see what the issue is. What is the issue again?
perhaps the issue is greed and/or fear (I'm assuming here):

greed: should I wait for it to fall further so I can buy more shares than today?
fear: what if I buy today and the market keeps falling?
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
Escapevelocity
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Re: I accidentally went into cash yesterday. What to do now?

Post by Escapevelocity »

I think he is implying maybe to wait and not catch the proverbial falling knife. Just buy back in and be done with it!

Big down days like today are normally followed by some degree of bounce-back the following day.
sheroo
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Re: I accidentally went into cash yesterday. What to do now?

Post by sheroo »

sailaway wrote: Thu Sep 03, 2020 12:10 pm Oh no, you sold high and already have an opportunity to buy lower!
+1 :oops:
Chuck107
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Re: I accidentally went into cash yesterday. What to do now?

Post by Chuck107 »

.....
Last edited by Chuck107 on Mon Oct 05, 2020 8:20 am, edited 1 time in total.
Alas, I find moderation of this forum too restrictive for my tastes, farewell.
Frugalbear
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Re: I accidentally went into cash yesterday. What to do now?

Post by Frugalbear »

unclescrooge wrote: Thu Sep 03, 2020 12:03 pm Why would you sell an ETF to buy an equivalent mutual fund?
Great point!

Also as others pointed out, why dont you just buy back in today?
Goal33
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Re: I accidentally went into cash yesterday. What to do now?

Post by Goal33 »

let us know in advance next time
Frugalbear
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Re: I accidentally went into cash yesterday. What to do now?

Post by Frugalbear »

Goal33 wrote: Thu Sep 03, 2020 12:21 pm let us know in advance next time
:D :D :D :D
tashnewbie
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Re: I accidentally went into cash yesterday. What to do now?

Post by tashnewbie »

In the future, if all you want to do is exchange an ETF share class for its mutual fund equivalent, and it's a Vanguard account, just contact them to do the conversion for you. It's tax-free. If you're trying to market time, I have no advice.
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jason2459
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Re: I accidentally went into cash yesterday. What to do now?

Post by jason2459 »

tashnewbie wrote: Thu Sep 03, 2020 12:26 pm In the future, if all you want to do is exchange an ETF share class for its mutual fund equivalent, and it's a Vanguard account, just contact them to do the conversion for you. It's tax-free. If you're trying to market time, I have no advice.
Are they doing ETF to MF? I thought it was one way only from MF to ETF.
Goal33
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Re: I accidentally went into cash yesterday. What to do now?

Post by Goal33 »

jason2459 wrote: Thu Sep 03, 2020 12:27 pm
tashnewbie wrote: Thu Sep 03, 2020 12:26 pm In the future, if all you want to do is exchange an ETF share class for its mutual fund equivalent, and it's a Vanguard account, just contact them to do the conversion for you. It's tax-free. If you're trying to market time, I have no advice.
Are they doing ETF to MF? I thought it was one way only from MF to ETF.
it's only MF to ETF
Topic Author
Blue456
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Re: I accidentally went into cash yesterday. What to do now?

Post by Blue456 »

tashnewbie wrote: Thu Sep 03, 2020 12:26 pm In the future, if all you want to do is exchange an ETF share class for its mutual fund equivalent, and it's a Vanguard account, just contact them to do the conversion for you. It's tax-free. If you're trying to market time, I have no advice.
I guess I was caught in the time of the market as opposed to trying to time the market. VFIAX is set for automatic purchase at the end of the day.
tashnewbie
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Re: I accidentally went into cash yesterday. What to do now?

Post by tashnewbie »

Goal33 wrote: Thu Sep 03, 2020 12:28 pm
jason2459 wrote: Thu Sep 03, 2020 12:27 pm
tashnewbie wrote: Thu Sep 03, 2020 12:26 pm In the future, if all you want to do is exchange an ETF share class for its mutual fund equivalent, and it's a Vanguard account, just contact them to do the conversion for you. It's tax-free. If you're trying to market time, I have no advice.
Are they doing ETF to MF? I thought it was one way only from MF to ETF.
it's only MF to ETF
Thanks for the clarification.
tashnewbie
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Re: I accidentally went into cash yesterday. What to do now?

Post by tashnewbie »

Blue456 wrote: Thu Sep 03, 2020 12:29 pm
tashnewbie wrote: Thu Sep 03, 2020 12:26 pm In the future, if all you want to do is exchange an ETF share class for its mutual fund equivalent, and it's a Vanguard account, just contact them to do the conversion for you. It's tax-free. If you're trying to market time, I have no advice.
I guess I was caught in the time of the market as opposed to trying to time the market. VFIAX is set for automatic purchase at the end of the day.
Just buy it today and set your auto purchases and be done. Good luck.
GoldenGoose
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Re: I accidentally went into cash yesterday. What to do now?

Post by GoldenGoose »

You have committed a cardinal sin of timing the market.

Joking aside, great timing of the market!!! Congrats. Now sit back and let the market drop lower until you feel that it has dropped low enough, then go back in again. I bet a lot of people are envious of your "mistake".
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arcticpineapplecorp.
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Re: I accidentally went into cash yesterday. What to do now?

Post by arcticpineapplecorp. »

GoldenGoose wrote: Thu Sep 03, 2020 12:37 pm You have committed a cardinal sin of timing the market.

Now sit back and let the market drop lower until you feel that it has dropped low enough, then go back in again.
OP, don't do this (that part in red above).
why?
1. investing isn't about using your "feelings'. you don't need to assess your feelings if you have an IPS, you just follow your IPS: https://www.bogleheads.org/wiki/Investm ... _statement
2. what if you wait for the market to go lower, and it doesn't?
3. how do you know the market will go lower?

the correct answer is:

if you had intended to invest the money, then just invest it.

just because you didn't get it invested, shouldn't change the fact that you want it invested.

otherwise you're letting short term events dictate your long term plan.

do you think that's wise?
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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David Jay
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Re: I accidentally went into cash yesterday. What to do now?

Post by David Jay »

unclescrooge wrote: Thu Sep 03, 2020 12:03 pm Why would you sell an ETF to buy an equivalent mutual fund?
I did that. Moved my portfolio from ETFs to mutual funds.

I like the simplicity of dollar denominated rebalancing. I was still working at the time, traveling extensively overseas and not always able to trade during market hours.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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Stinky
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Re: I accidentally went into cash yesterday. What to do now?

Post by Stinky »

GoldenGoose wrote: Thu Sep 03, 2020 12:37 pm You have committed a cardinal sin of timing the market.

Now sit back and let the market drop lower until you feel that it has dropped low enough, then go back in again.
Bad advice. Definitely non-Boglehead way of approaching this situation. The Boglehead way would be to buy today, or as soon as possible.

But GoldenGoose called it right. Doing what he suggested would be market-timing.
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MotoTrojan
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Re: I accidentally went into cash yesterday. What to do now?

Post by MotoTrojan »

This is pretty hilarious, nicely done! Free 3.6% boost in your shares. You must be feeling lucky.
VaR
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Re: I accidentally went into cash yesterday. What to do now?

Post by VaR »

Escapevelocity wrote: Thu Sep 03, 2020 12:12 pm Big down days like today are normally followed by some degree of bounce-back the following day.
I don't think this is really true.
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Re: I accidentally went into cash yesterday. What to do now?

Post by flaccidsteele »

unclescrooge wrote: Thu Sep 03, 2020 12:03 pm Why would you sell an ETF to buy an equivalent mutual fund?
+1 ^this
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
stocknoob4111
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Re: I accidentally went into cash yesterday. What to do now?

Post by stocknoob4111 »

at least in Vanguard you don't need it to wait for it to settle, you can huy something else right away. The only restriction is withdrawing proceeds out of the brokerage account.
DanFrancis
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Re: I accidentally went into cash yesterday. What to do now?

Post by DanFrancis »

I do not understand the context of what you are trying to do. I suggest you read some more on investing before you end up making a bigger mistake.
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Blue456
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Re: I accidentally went into cash yesterday. What to do now?

Post by Blue456 »

stocknoob4111 wrote: Fri Sep 04, 2020 1:08 am at least in Vanguard you don't need it to wait for it to settle, you can huy something else right away. The only restriction is withdrawing proceeds out of the brokerage account.
Yeah I was surprised too. It appears that as of 8AM eastern, VFIAX was purchased at $319. Which is weird because the closing price yesterday was $317.
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jabberwockOG
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Re: I accidentally went into cash yesterday. What to do now?

Post by jabberwockOG »

You could buy in today and feel good about the potential small gain but there is no certainty that the market will rise or fall from this point. Your buy in today might precede a further 20% decline before end of year or it could be a 20% gain - the point is nobody knows. A secondary point is that small or even large jumps up or down in any given week or month are completely meaningless to the long term investor, the only thing that matters in the long run is the long run trend.
MrJedi
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Re: I accidentally went into cash yesterday. What to do now?

Post by MrJedi »

Blue456 wrote: Fri Sep 04, 2020 7:04 am
stocknoob4111 wrote: Fri Sep 04, 2020 1:08 am at least in Vanguard you don't need it to wait for it to settle, you can huy something else right away. The only restriction is withdrawing proceeds out of the brokerage account.
Yeah I was surprised too. It appears that as of 8AM eastern, VFIAX was purchased at $319. Which is weird because the closing price yesterday was $317.
I think you're mistaking with VOO.

VFIAX closed at 319.84
VOO closed at 317.36

Vanguard allowed you to make the purchase with unsettled funds, floating the money for you. In my experience Vanguard generally allows this even in a cash account (without margin) when the settlement times don't work right (your ETF settles in T+2 but MF settles in T+1, so Vanguard is giving you float for a day plus the weekend).
MotoTrojan
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Re: I accidentally went into cash yesterday. What to do now?

Post by MotoTrojan »

VaR wrote: Thu Sep 03, 2020 11:15 pm
Escapevelocity wrote: Thu Sep 03, 2020 12:12 pm Big down days like today are normally followed by some degree of bounce-back the following day.
I don't think this is really true.
I wouldn't be surprised in the last decade of dip-buying frenzy. I will say that this was the 3rd largest drop coming off an all-time-high in history, and in both the other cases a month later the market had moved further down. But nobody really knows anything...
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topper1296
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Re: I accidentally went into cash yesterday. What to do now?

Post by topper1296 »

Aren't ETFs more tax efficient than the equivalent mutual fund in a taxable account?
MotoTrojan
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Re: I accidentally went into cash yesterday. What to do now?

Post by MotoTrojan »

topper1296 wrote: Fri Sep 04, 2020 7:54 am Aren't ETFs more tax efficient than the equivalent mutual fund in a taxable account?
This is generally true except for the Vanguard mutual funds which have an ETF share class (VSIAX/VBR, VTSAX/VTI, VFIAX/VOO, VTIAX/VXUS, etc/etc...). They have a patented dual share-class approach that gives the mutual funds the same tax-benefit. Patent expires in 2025 if memory serves, then you may see this more elsewhere.
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Re: I accidentally went into cash yesterday. What to do now?

Post by abuss368 »

Blue456 wrote: Thu Sep 03, 2020 12:02 pm Yesterday I sold my VOO ETF with small gains so that I could purchase mutual fund. But it was too late :oops: and market was closed already. Now US stocks are dropping. What should I do? Purchase VFIAX today at or wait and if so for how long. My IPS does not address this issue.

EDIT: VFIAX is set in automatic purchase at the end of the day.

EDIT 2: Annoyed. It looks like the safe of VOO has completed but the cash is not settled. So in effect today VFIAX was not purchased. I guess I have to wait for money to settle. God knows how long this takes.
I would consider total market index funds and tune out the noise. Worse thing to be doing is listening to the talking heads.
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