Invest $200K cash to stock funds

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artking99
Posts: 5
Joined: Thu Apr 07, 2016 3:57 pm

Invest $200K cash to stock funds

Post by artking99 » Wed Oct 11, 2017 3:59 pm

Just finished downsizing my house, and received about $200K in sales proceeds. I have about 12 months emergency fund, and would like to invest all these $200K in stock mutual funds. I love Vanguard, and plan to invest in its sector specific funds, such as Healthcare, Technology, Consumer Staples and Financial, however all these funds have $100K minimum investment requirements. So what are my other options? Thanks. :happy
Last edited by artking99 on Wed Oct 11, 2017 4:17 pm, edited 1 time in total.

DavidRoseMountain
Posts: 42
Joined: Sun Nov 30, 2014 3:27 pm

Re: Invest $200K cash to stock funds

Post by DavidRoseMountain » Wed Oct 11, 2017 4:17 pm

I personally prefer not to do market timing, so I would just invest in a total stock market index accompanied by a total international index.

artking99
Posts: 5
Joined: Thu Apr 07, 2016 3:57 pm

Re: Invest $200K cash to stock funds

Post by artking99 » Wed Oct 11, 2017 4:22 pm

DavidRoseMountain wrote:
Wed Oct 11, 2017 4:17 pm
I personally prefer not to do market timing, so I would just invest in a total stock market index accompanied by a total international index.
I plan to put the money to work over 3 months period of time thru auto-invest feature. Is this considered market timing? Or do you mean investing in sector funds now is market timing?

David Scubadiver
Posts: 394
Joined: Thu Mar 24, 2016 8:40 am

Re: Invest $200K cash to stock funds

Post by David Scubadiver » Wed Oct 11, 2017 4:27 pm

I never heard of a fund requiring a $100,000 minimum investment. They must have a class of shares that has lower minimums, no?

Anyway, sector investing may not be market timing but it is equally suspect given that you have no special knowledge that one sector will outperform another on a risk-adjusted basis, blah blah blah.

If I had $200,000 to invest I would invest $100,000 in VTI, $50,000 in VXUS and $50,000 in BND.

Well, NO I wouldn't do that. Maybe I should, but instead I'd dump it all into my account at Wisebanyan and let the robot invest for me.

MotoTrojan
Posts: 699
Joined: Wed Feb 01, 2017 8:39 pm

Re: Invest $200K cash to stock funds

Post by MotoTrojan » Wed Oct 11, 2017 4:31 pm

ETF equivalents won't have a limit, but I still strongly disagree with this plan.

DavidRoseMountain
Posts: 42
Joined: Sun Nov 30, 2014 3:27 pm

Re: Invest $200K cash to stock funds

Post by DavidRoseMountain » Wed Oct 11, 2017 4:49 pm

artking99 wrote:
Wed Oct 11, 2017 4:22 pm
DavidRoseMountain wrote:
Wed Oct 11, 2017 4:17 pm
I personally prefer not to do market timing, so I would just invest in a total stock market index accompanied by a total international index.
I plan to put the money to work over 3 months period of time thru auto-invest feature. Is this considered market timing? Or do you mean investing in sector funds now is market timing?
I'm not one of the wise experienced people on bogleheads. But I do think that choosing sectors is a form of market timing.

lack_ey
Posts: 5604
Joined: Wed Nov 19, 2014 11:55 pm

Re: Invest $200K cash to stock funds

Post by lack_ey » Wed Oct 11, 2017 4:55 pm

David Scubadiver wrote:
Wed Oct 11, 2017 4:27 pm
I never heard of a fund requiring a $100,000 minimum investment. They must have a class of shares that has lower minimums, no?
There are some funds with higher listed minimums than that for the most accessible share class. Vanguard actually has one (the equity market neutral fund), and others do as well. At some brokerages it's common to be able to get in for less, though, generally speaking.

More relevantly here, those non-REIT Vanguard sector index funds do have $100k minimums. That's not a mistake. Most people just use the ETF share class, though, which cannot have a minimum (other than needing to buy 1 whole share).

I don't know offhand if there are non-Vanguard sector index funds available with lower minimums in mutual fund format if that is insisted upon.

DavidRoseMountain wrote:
Wed Oct 11, 2017 4:49 pm
artking99 wrote:
Wed Oct 11, 2017 4:22 pm
DavidRoseMountain wrote:
Wed Oct 11, 2017 4:17 pm
I personally prefer not to do market timing, so I would just invest in a total stock market index accompanied by a total international index.
I plan to put the money to work over 3 months period of time thru auto-invest feature. Is this considered market timing? Or do you mean investing in sector funds now is market timing?
I'm not one of the wise experienced people on bogleheads. But I do think that choosing sectors is a form of market timing.
I think if the plan is to keep these kinds of sector overweights as a long-term strategic allocation (rather than buying with the intention to sell out at another time), that would be more frequently described as making sector bets rather than market timing.

Anyway, it's less important what you call it than what the underlying properties are.

So I'd want to know the rationale and the anticipated holding period, more details about the why.

dcarste
Posts: 113
Joined: Mon Apr 27, 2015 4:55 pm

Re: Invest $200K cash to stock funds

Post by dcarste » Wed Oct 11, 2017 5:21 pm

How old are you and how close to retirement are you? What is your net worth excluding your house (you need a roof over your head).

Excluding your emergency fund, what is your current asset allocation?

Then I could give you at least IMO good advice, otherwise I'm shooting in the dark.

dbr
Posts: 23273
Joined: Sun Mar 04, 2007 9:50 am

Re: Invest $200K cash to stock funds

Post by dbr » Wed Oct 11, 2017 5:34 pm

I think the part of making a sector bet that we might call market timing is that sector bets don't seem to be proven on long term average and therefore would seem to be attempts to find hot segments of the market at a particular time.

What is the basis for wanting to concentrate in certain sectors rather than buy the whole market?

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