what to buy when stock market is a new high?

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wlht
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what to buy when stock market is a new high?

Post by wlht » Sun Aug 14, 2016 2:39 pm

Still have about 150k in my Vanguard account, what to buy now? Thinking of buying total domestic stock market index and an energy index fund, but they are also at high point? should I wait for a pull back? thanks

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nedsaid
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Re: what to buy when stock market is a new high?

Post by nedsaid » Sun Aug 14, 2016 3:46 pm

Invest according to your plan. What is your asset allocation?

The US Market is hitting new highs and valuations look stretched here but remember that bull markets always look expensive. Hitting new highs is normal market behavior.

Why do you have $150,000 not invested in your Vanguard account? Was it a rollover? Did you get scared and cash out?

Hard to comment with so little information. Get a plan Stan!
A fool and his money are good for business.

livesoft
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Re: what to buy when stock market is a new high?

Post by livesoft » Sun Aug 14, 2016 3:51 pm

I have an asset allocation. All my assets are in balance according to my plan, so if I had $150K to invest, I would have to buy some of everything to stay in balance. That would includes bond funds, US equity funds, foreign equity funds, etc.

As noted, what's your plan tell you to do?
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Jack FFR1846
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Re: what to buy when stock market is a new high?

Post by Jack FFR1846 » Sun Aug 14, 2016 3:55 pm

I'd buy the same things I'd buy when the market was at the last high.....or the last low.....or the last in-between.
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TRC
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Re: what to buy when stock market is a new high?

Post by TRC » Sun Aug 14, 2016 4:07 pm

As others have said, buy according to your asset allocation strategy. By the sound of your post, it's sounds like you don't have one. Do you need assistance establishing one?

finite_difference
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Re: what to buy when stock market is a new high?

Post by finite_difference » Sun Aug 14, 2016 4:12 pm

What I always buy. It's automated, after all. I am not going to change my AA based on conditions. If you do, then you are practicing market timing.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

delamer
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Re: what to buy when stock market is a new high?

Post by delamer » Sun Aug 14, 2016 4:17 pm

I see you are a first time poster on the forum. Frankly, you've come to the wrong place if you are looking for advice on making investment decisions based on current market conditions.

I suggest you read the wiki for information on how Bogleheads invest.
Last edited by delamer on Sun Aug 14, 2016 4:32 pm, edited 3 times in total.

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tainted-meat
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Re: what to buy when stock market is a new high?

Post by tainted-meat » Sun Aug 14, 2016 4:24 pm

International valuations are attractive, not as attractive as they were around February but still attractive.

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Phineas J. Whoopee
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Re: what to buy when stock market is a new high?

Post by Phineas J. Whoopee » Sun Aug 14, 2016 6:25 pm

Hi wlht, and welcome to the forum!

In the spirit of not biting newbies, let me explain a little about the concept upthread posters are referring to. When first encountered many people find it counterintuitive. I'll try to be brief (audible collective chuckle rises from all the people who've read my past writing).

Markets go down and up and down and down some more and up a little and yet further down and up up up and down again, continually. There's nothing any of us can do about it, and furthermore, there's no reliable way to predict the movements in advance.

Long-term upward markets will often be at new highs. US stock markets have been upward ones long term.

We don't know if it will continue into the future, especially over any preset period of time, including any of our remaining lifetimes. We're deliberately taking risks. Not knowing for sure what will happen is part and parcel of doing so. One might avoid the stock market, but one can't avoid all financial and life-type risks.

In aggregate, that is, adding up all the positives and subtracting all the negatives, participants in the market get the market return, which might be negative in any given year. There's no other return for investors to receive, and there's nobody other than the market participants for it to go to.

Here's the key concept: although you didn't use the words, the press says we're at all-time highs, but in reality we're only at up-until-now-so-far highs. The market may never again be lower than it is now. We're taking risks, so we're as prepared for it to go lower and stay there for a long time as we are for it to only go up from here.

We advocate selecting an asset allocation, a split between more-risky assets, like stocks, and less-risky ones, like fixed income, that one can live with long term. It isn't an easy or quick decision, and many new people initially assume they will be comfortable with riskier portfolios than they really are, when the inevitable downturns come.

Put it all together, and nobody can tell today whether your portfolio's return will be higher if invested immediately, or higher if you wait until later. We simply don't know.

Should the long-term direction of markets remain up, it's better in general to get in earlier than later. It doesn't guarantee your own results will be better by buying now. Risk.

Does that help? Do you have questions about it? If you do, please ask.

Once again, welcome.

PJW

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BolderBoy
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Re: what to buy when stock market is a new high?

Post by BolderBoy » Sun Aug 14, 2016 8:22 pm

wlht wrote:Still have about 150k in my Vanguard account, what to buy now? Thinking of buying total domestic stock market index and an energy index fund, but they are also at high point? should I wait for a pull back? thanks
Is the $150k in cash, waiting to be invested? The total domestic stock index is usually appropriate for anyone (even everyone). It also includes plenty of energy stocks so you don't need to look at a sector specific fund.

Do you have a bond fund? What is your desired asset allocation? How old are you?

We have even more questions than you do.

Welcome to the BH forum!
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Afty
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Re: what to buy when stock market is a new high?

Post by Afty » Sun Aug 14, 2016 9:14 pm

The market is often at an all time high, because the general trend is upward.
Based on monthly numbers, the S&P 500 has spent 31.9% of its life within 5% of its (up to then) all time high.

It has spent 23.9% of its life within 2% of its (up to then) all time high.

It has spent 15.7% of its life at a new all time high.
viewtopic.php?t=196681#p3002747

Cramerica
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Re: what to buy when stock market is a new high?

Post by Cramerica » Mon Aug 15, 2016 12:47 am

These threads seem to be popping up quite a bit right now.

The market is up about 22% since Feb 11 2016, but it is only up about 2% since May 2015.

We already had the correction that people seem to be worrying about...we are now just recovering back to baseline.

22twain
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Re: what to buy when stock market is a new high?

Post by 22twain » Mon Aug 15, 2016 1:38 am

wlht wrote:Still have about 150k in my Vanguard account
How does that compare in size to the rest of your portfolio (the part not covered by the "still")? If it's a lot smaller, then it doesn't make a lot of difference what you do with it.
My investing princiPLEs do not include absolutely preserving princiPAL.

magneto
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Re: what to buy when stock market is a new high?

Post by magneto » Mon Aug 15, 2016 5:58 am

1. Draw up an Investment Plan, if not already drafted.

2. If inertia/valuations a problem, take a look at 'Value Averaging'.
Might just appeal?
'There is a tide in the affairs of men ...', Brutus (Market Timer)

joebh
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Re: what to buy when stock market is a new high?

Post by joebh » Mon Aug 15, 2016 6:33 am

wlht wrote: should I wait for a pull back?
No. Rather than having your money sit on the sidelines, invest it now according to your overall investment plan.

There is nothing magic about the stock market being at a new high. It's been that way before; it'll be that way again.

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munemaker
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Re: what to buy when stock market is a new high?

Post by munemaker » Mon Aug 15, 2016 6:38 am

Buy the same things in the same way you would if the market was not at a new high.

Split between Vanguard Total Stock Market Index, Total Bond Market Index and International Equity Index.

Why would you do anything else?

heyyou
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Re: what to buy when stock market is a new high?

Post by heyyou » Mon Aug 15, 2016 2:03 pm

The future is unknown, and that risk is why stock investing pays more than CDs or bonds.

Regardless of when you buy, due to normal stock market volatility, the price will drop temporarily within a few days of your purchase, and there will be a market crash within a few years of your purchase, and thirty years from now, after numerous market crashes, your assets will have grown by several or many multiples. Wait until you have read about behavioral biases that label the normal reasonable thoughts that you are having now, then put your savings in the market knowing that your fears will come true, but eventually your hopes for gains will also come true if you do not sell out during the bad periods. There are no shortcuts to skip the risky parts of investing, you just have to accept them, and live with and through those risks in order to get the rewards. That is what this site offers, a mutual support group when the inevitable crashes are whittling down our assets.

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stemikger
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Re: what to buy when stock market is a new high?

Post by stemikger » Mon Aug 15, 2016 2:10 pm

wlht wrote:Still have about 150k in my Vanguard account, what to buy now? Thinking of buying total domestic stock market index and an energy index fund, but they are also at high point? should I wait for a pull back? thanks
Is this a taxable or tax deferred?

If it is a tax deferred retirement plan, it shouldn't matter what the markets are doing, just consistently buy over time according to your plan. You should have an AA as part of your plan and risk tolerance and dollar cost average in. It shouldn't matter what the market is doing.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

livesoft
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Re: what to buy when stock market is a new high?

Post by livesoft » Mon Aug 15, 2016 2:13 pm

There seems to be a consensus from responders on what to do.

I wonder if 'wlht' will come back and tell us what they did?
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Toons
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Re: what to buy when stock market is a new high?

Post by Toons » Mon Aug 15, 2016 2:19 pm

If you holding for a period of ten years or longer,
I would feel comfortable with the
Balanced Index Fund(Admiral)
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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dratkinson
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Re: what to buy when stock market is a new high?

Post by dratkinson » Mon Aug 15, 2016 5:49 pm

wlht wrote:Still have about 150k in my Vanguard account, what to buy now? Thinking of buying total domestic stock market index and an energy index fund, but they are also at high point? should I wait for a pull back? thanks
Simple question. And you'd think there would be a simple answer. There is, if you have the requisite background information, ...it's "keep investing as you know to invest and have been investing."

But if you don't have the required background investing information, then your task becomes to get it. And that is simple to do.
--Read the book The Boglehead's Guide to Investing. Get it from your local library, or through inter-library loan, or buy it.
--Begin reading in the Wiki (link: screen top right) while waiting on your book. Read all of the linked introductory material, and everything else that interests you.

Example of what you will learn. An energy fund is tax inefficient, so belongs in a tax-advantaged account (401k, IRA,...), not in a taxable account.
See: https://www.bogleheads.org/wiki/Princip ... _placement


Take as much time as you need to read/study and come up to speed. We'll wait for you.

After you've completed your required study, then post your financial situation in the format requested in the sticky "Asking Portfolio Questions." That will give the forum enough information to understand your financial situation and answer your questions. And your study will give you enough information to understand your replies.



Welcome.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

ddurrett896
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Re: what to buy when stock market is a new high?

Post by ddurrett896 » Mon Aug 15, 2016 5:56 pm

Saw a commercial that said "buy silver, call for a rollover IRA kit."

wlht
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Re: what to buy when stock market is a new high?

Post by wlht » Mon Aug 15, 2016 8:26 pm

Thanks all for great help! Yes, the $150k is from a roll over IRA account. I am learning and starting my asset allocation. I understand now that we should not try to time the market, so I will just use this $150k tomorrow - stay in the course, and buy funds per my defined asset allocation. In the long term, as you guys said, it does not matter if I buy today or tomorrow. I am 45 years old, my AA will be about 75% stocks, and 25% bond. I know I am a little non-conservative here. I can save about $65k each year including pre- and post-tax contributions.

Any suggestions? I appreciate your help.

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BeBH65
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Re: what to buy when stock market is a new high?

Post by BeBH65 » Tue Aug 16, 2016 12:37 pm

wlht wrote:Thanks all for great help! Yes, the $150k is from a roll over IRA account. I am learning and starting my asset allocation. I understand now that we should not try to time the market, so I will just use this $150k tomorrow - stay in the course, and buy funds per my defined asset allocation. In the long term, as you guys said, it does not matter if I buy today or tomorrow. I am 45 years old, my AA will be about 75% stocks, and 25% bond. I know I am a little non-conservative here. I can save about $65k each year including pre- and post-tax contributions.

Any suggestions? I appreciate your help.
Hello wlht ,
How was this invested before the rollover?
How are your other accounts invested? One should consider all investment accounts as one to build a balanced portfolio.
We are missing information to give you a comprehensive answer. Suggest you update the opening post according to the format mentioned in Asking_portfolio_questions.

Many Bogleheads like the three-fund portfolio. If you wish you read about it in the Wiki.

-- corrected typo --

Regards,
Last edited by BeBH65 on Tue Aug 16, 2016 3:31 pm, edited 1 time in total.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

ponyboy
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Re: what to buy when stock market is a new high?

Post by ponyboy » Tue Aug 16, 2016 12:49 pm

I bet 30 years ago people asked the same questions..."with the stock market being so high" etc etc. Stay the course.

PandaBear
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Re: what to buy when stock market is a new high?

Post by PandaBear » Tue Aug 16, 2016 12:52 pm

May I ask why you were thinking about an energy sector fund?

letsgobobby
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Re: what to buy when stock market is a new high?

Post by letsgobobby » Tue Aug 16, 2016 3:20 pm

wlht wrote:Thanks all for great help! Yes, the $150k is from a roll over IRA account. I am learning and starting my asset allocation. I understand now that we should not try to time the market, so I will just use this $150k tomorrow - stay in the course, and buy funds per my defined asset allocation. In the long term, as you guys said, it does not matter if I buy today or tomorrow. I am 45 years old, my AA will be about 75% stocks, and 25% bond. I know I am a little non-conservative here. I can save about $65k each year including pre- and post-tax contributions.

Any suggestions? I appreciate your help.
that sounds reasonable but if you would like more detailed advice, please post in the format suggested at the top of this forum.

welcome aboard.

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Phineas J. Whoopee
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Re: what to buy when stock market is a new high?

Post by Phineas J. Whoopee » Tue Aug 16, 2016 3:49 pm

Here's a link to the Asking Portfolio Questions format.
PJW

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Re: what to buy when stock market is a new high?

Post by itstoomuch » Tue Aug 16, 2016 4:48 pm

Depends
I am looking for, "what to sell," in Discretionary, although I did buy something today on big pull back in one of my favorite companies which I think was overbought.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

livesoft
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Re: what to buy when stock market is a new high?

Post by livesoft » Tue Aug 16, 2016 4:59 pm

With most all funds down today, we can say that the stock market is no longer at a new high. Now one can buy anything they want to. :)
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wlht
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Re: what to buy when stock market is a new high?

Post by wlht » Wed Aug 17, 2016 8:04 pm

i sold all my extended market index, and 2035 retirement fund and bought total world stock and total domestic stock index. This is part of my process to simplify my portfolio per my asset allocation.

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Phineas J. Whoopee
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Re: what to buy when stock market is a new high?

Post by Phineas J. Whoopee » Thu Aug 18, 2016 11:42 am

wlht wrote:i sold all my extended market index, and 2035 retirement fund and bought total world stock and total domestic stock index. This is part of my process to simplify my portfolio per my asset allocation.
This one of the reasons why we like to include both fund names and ticker symbols.

Do you mean:
Vanguard's Total World Stock Index Fund, VTWSX; and
Vanguard's Total Stock Market Index Fund, VTSMX.

If so, you'll have roughly 3/4 in US stock, and 1/4 in international assuming you bought them in the same amount. That may be what you want. Total World is approximately 50% US and 50% international today. The proportion shifts as global market cap does.

Maybe instead of Total World, you meant:
Vanguard's Total International Stock Index Fund, VGTSX.

An even split of it and Total Stock would be half US and half international, which may be what you want.

PJW

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BeBH65
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Re: what to buy when stock market is a new high?

Post by BeBH65 » Thu Aug 18, 2016 12:35 pm

BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

itstoomuch
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Re: what to buy when stock market is a new high?

Post by itstoomuch » Thu Aug 18, 2016 1:31 pm

The same things when the Stock Market is at a new low. :oops: :idea: :greedy
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

wlht
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Re: what to buy when stock market is a new high?

Post by wlht » Thu Aug 18, 2016 9:06 pm

I bought VTWIX and VPMAX for my 401k account. Our company's 401k plan does nothave VTWSX.

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whodidntante
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Re: what to buy when stock market is a new high?

Post by whodidntante » Thu Aug 18, 2016 9:07 pm

A car.

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badbreath
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Re: what to buy when stock market is a new high?

Post by badbreath » Thu Aug 18, 2016 9:21 pm

I invested $210,000 three days ago in this high market dew to a windfall. I expect it to go up and down but mostly up. I really do not market time as you can see.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

goldendad
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Re: what to buy when stock market is a new high?

Post by goldendad » Thu Aug 18, 2016 10:20 pm

I would buy lunch (and then stick to my asset allocation model).

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Redstorm
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Re: what to buy when stock market is a new high?

Post by Redstorm » Thu Oct 11, 2018 6:12 pm

Interesting to look back a few years

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