Not invested. Help!
Not invested. Help!
I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?
Re: Not invested. Help!
The best way is to invest everything now into your desired risk level.
The other method which may make you feel better is to average into the market over a short period.
I would probably choose averaging in over lump sum, even though I know lump sum is supposed to be better. We just seem at or near a local maxima.
The other method which may make you feel better is to average into the market over a short period.
I would probably choose averaging in over lump sum, even though I know lump sum is supposed to be better. We just seem at or near a local maxima.
Re: Not invested. Help!
OP, I faced this a year ago. I too hated watching everything go up. So I decided to start quarterly averaging into my desired bond and stock allocation over a 3-4 year period. It is too long, I know, but minimizes regret in case there is a big retreat in the first year or so.
Re: Not invested. Help!
In April I went through something similar. The last year and a quarter I was with a FA who didn't invest in the asset allocation I asked him to. I was at about 40% cash cause he was "waiting for better buying opportunities". Well I got sick of waiting and started reading lots of books and this april I came up with a plan got it approved by the wife, got everything transferred and went all in. Now to some extent I was nervous because it seems like we are at market highs, but then I reminded myself timing the market is why I am in the situation I am in.
Re: Not invested. Help!
Start slowly and start dollar cost averaging into a solid, core index fund (after you prepare your asset allocation). Yes the market's high but with a long time horizon you still should be in equities.
Lucky3
Lucky3
- InvestorNewb
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- Joined: Mon Sep 03, 2012 11:27 am
Re: Not invested. Help!
You remind me of me in November 2012. In February 2013 I went all in. With the way things are going right now, I'm happy I did.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
Re: Not invested. Help!
If you are freaking out over missing a run-up, odds are you'll really freak out during a crash. I suggest setting a conservative allocation for your age and situation.boggler wrote:I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?
Re: Not invested. Help!
As soon as I'm fully invested, I stop worrying about it. The difficult part is getting to that point.Boglenaut wrote:If you are freaking out over missing a run-up, odds are you'll really freak out during a crash. I suggest setting a conservative allocation for your age and situation.boggler wrote:I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?
Re: Not invested. Help!
Seconded.Boglenaut wrote:If you are freaking out over missing a run-up, odds are you'll really freak out during a crash. I suggest setting a conservative allocation for your age and situation.boggler wrote:I've got a bunch of money sitting in cash, because I was still trying to figure out my asset allocation and thus haven't invested. I'm watching the market climb over the past week or two, and freaking out that I haven't done anything yet. What's a good way to get over this and get it done?
Just setup an automated recurring investment at Vanguard with a fund or three, and start investing a certain portion of the cash every month.
There is no greatness where there is no simplicity, goodness and truth. -L. Tolstoy
Re: Not invested. Help!
To me the best way is to do something - even if it is small. e.g. if you know you are going to allocate money to the Total Stock Market but don't know how much. Put $5,000 or $10,000 in. (I'm assuming when you figure out your allocation you will want to have much more than that.) The point is you don't have to have everything figured out just a rough idea of some of your choices and then do something. You will feel better and it will make the next investment easier.
Once you decide put a small amount in each fund and then DCA in over the next 6 months or so.
Once you decide put a small amount in each fund and then DCA in over the next 6 months or so.
Re: Not invested. Help!
Remind yourself that the market undergoes a significant drop almost every year and a huge drop every now and then that takes years to recover.
Go look at the chart of the S&P500 on finance.yahoo.com. look at the charts for the last 2, 5, and 10 years and see just how up and down the market can be. Yes, it might just keep going up, but it is just as likely that something could happen next week or month that sends it down 30%--or more.
Over time the market tends to go up, but it can stay down or sideways for many years at a time. And the next time it drops, the Fed isn't going to be able to haul it back up because they have already done what they can do.
Go look at the chart of the S&P500 on finance.yahoo.com. look at the charts for the last 2, 5, and 10 years and see just how up and down the market can be. Yes, it might just keep going up, but it is just as likely that something could happen next week or month that sends it down 30%--or more.
Over time the market tends to go up, but it can stay down or sideways for many years at a time. And the next time it drops, the Fed isn't going to be able to haul it back up because they have already done what they can do.
Re: Not invested. Help!
Choose an appropriate TR fund, put it all in, and then devise a suitable plan, write it down, act on it.
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