Where to invest $100k today?

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Topic Author
CAPRI
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Joined: Thu Sep 22, 2022 3:11 pm

Where to invest $100k today?

Post by CAPRI »

Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
hudson
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Joined: Fri Apr 06, 2007 9:15 am

Re: Where to invest $100k today?

Post by hudson »

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
VTI is enough and lump sum.
Last edited by hudson on Fri Sep 23, 2022 4:16 am, edited 1 time in total.
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TomatoTomahto
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Re: Where to invest $100k today?

Post by TomatoTomahto »

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
Where’s your Roth invested? I’d do that one more time, in a lump. I am not you though.
I get the FI part but not the RE part of FIRE.
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

Roth is 38.66% Target Date 2045 (FIOFX) and 61.34% S&P (FXAIX). Already maxed this year.
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arcticpineapplecorp.
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Re: Where to invest $100k today?

Post by arcticpineapplecorp. »

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
welcome to the group.

here's some thoughts I just posted yesterday about a similar question (with some add on favorites from the past) :

1. lump sum has done better than DCA 2/3rds of the time. That's because the market has tended to go up more than down. If you don't believe that, ask yourself why you'd be investing in the market at all. So knowing that, you'd want to get money invested sooner rather than later otherwise you could be buying at higher prices if the market goes up (that leads to lower returns).

You're trying to deal with regret minimization and there are two potential regrets:
A. You lump sum and the market goes down after (you lose money you invested)
B. You don't invest and the market goes up (and you lost the opportunity to have made money)

Which is the greater regret?

If it's #A then DCA.
If it's #B then lump sum

2. here's an article that states if you want to DCA, don't do so more than 12 months:
http://www.efficientfrontier.com/ef/997/dca.htm

3. have you thought about:
a. what happens if you DCA over the number of months you've decided and then the market goes down next year (after you've DCA'd)?
b. what's happened to the money you've had in the market already and why should this new money be any different from money already invested?

In other words, by DCAing you're trying to either avoid losing money in a market you believe will continue to go down (fear) or make money buying shares at lower prices (greed) but if it's the former why don't you sell money you currently have invested and if it's the latter then why aren't you borrowing money to invest more than just this "sideline money"?

you're trying to market time. and you're trying to manage your emotional response to an uncertain market. But isn't the market always uncertain?

4. I like what George Sistri says in the last paragraph: "Most investors imagine there are two distinct investing environments; times when the future is clear and investing in stocks is safe and times when the future is unclear and investing in stocks is risky." (source: https://oncoursefp.com//images/Vectors% ... 0final.pdf) Nothing could be further from the truth. And the solution is: "have a properly constructed, diversified portfolio that accounts for these realities."

Image

Q: When do I buy?
A: When you have the money.

Q: When do I sell?
A: When you need the money.

If you have money you want to invest, but don't, you're market timing.

5. I'll let Larry Swedroe have the final word:
Here is another way to think about DCA. Assume that staying fully invested in equities is suboptimal, meaning you should sell all your equities and then DCA back into the market. At the next investment period you have some money in the stock market already. While you planned to periodically reinvest in the market, you also determined that staying fully invested is suboptimal. You run into this difficulty: Do you continue to buy equities, sell your existing holdings, or do both? Logicaly, DCA cannot be effective...

While DCA is not an optimal investment strategy, it has value when facing the "lesser of two evils," that is, when an investor simply cannot "take the plunge" and invest all at once for fear of what could happen to the stock market. Fear causes paralysis. If the market rises after they delay, they think, "How can I buy now at even higher prices?" If the market falls, "I can't buy now. That bear market I was afraid of is here." Once deciding not to buy, how do you decide to ever buy again?

The Only Guide You'll Ever Need for the Right Financial Plan, by Larry Swedroe, page 182, appendix B
if you have a plan, just follow it. DCA makes one feel good because if they have some (but not all) invested and the market goes up, they made money (just on what was invested, not all). If the market falls, they feel smart because they didn't lose more money (because it wasn't all invested).

Larry says:
Investors and advisors do not always base decisions on logic or evidence. Emotions, such as fear often play a far greater role in decision making.
But make a plan, write it down and stick to it no matter what.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
Jack FFR1846
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Re: Where to invest $100k today?

Post by Jack FFR1846 »

Open a taxable account with one of the "good" brokers who is giving money away to open an account. I'd guess Schwab is doing that. Put the entire amount in there. Once it's available to trade (it's next day with Schwab), buy all SCHB and then just think about where you "really" want it. How long to wait? I don't know...maybe a year. In the mean time, it's making market returns. If SCHB scares you, maybe get BND for bond security or VTI if you like Vanguard better than Schwab securities. I have both and feel they are exactly the same thing. Most important point is that while you're waiting, you're earning nothing and inflation is charging you money daily.
Bogle: Smart Beta is stupid
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Taylor Larimore
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Re: Where to invest $100k today?

Post by Taylor Larimore »

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
CAPRI:

Welcome to the Bogleheads Forum!

Consider the many benefits of The Three-Fund Portfolio.

When you have decided your best asset-allocation using the Asset-Allocation link in the The Three-Fund Portfolio post, I would "lump sum." Bear markets offer an especially good opportunity to lump-sum.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "There may be better investment strategies than owning just three broad-based index funds but the number of strategies that are worse is infinite."
"Simplicity is the master key to financial success." -- Jack Bogle
mikejuss
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Re: Where to invest $100k today?

Post by mikejuss »

It's a great time buy. VTSAX and chill.
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ruralavalon
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Re: Where to invest $100k today?

Post by ruralavalon »

Welcome to the forum :D .

It's great to see that you are debt free, making use of tax-advantaged accounts, investing using very a diversified stock index fund and I-bonds.

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
CAPRI wrote: Thu Sep 22, 2022 8:22 pm Roth is 38.66% Target Date 2045 (FIOFX) and 61.34% S&P (FXAIX). Already maxed this year.
I suggest investing in a lump sum now. That has worked out best about 2/3 of the time.

If you are emotionally incapable of all-at-once then consider 50% now in a lump sum, and the other 50% at 10% per month for 5 months.

For stocks use a very diversified, very low cost fund like Vanguard Total Stock Market ETF (VTI). Consider adding some international stocks using a very diversified, very low cost fund like Vanguard Total International Stock ETF (VXUS).

What is your desired overall asset allocation (stock/bond mix)? What is your tax bracket both federal and state? Consider a very diversified, very low cost bond fund (a tax-exempt fund if in a high tax bracket.)

What is your tax filing status? (If married filing jointly consider an IRA for your spouse, or a another $10k in I bonds for your spouse.)
Last edited by ruralavalon on Fri Sep 23, 2022 9:50 am, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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JoeRetire
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Re: Where to invest $100k today?

Post by JoeRetire »

CAPRI wrote: Thu Sep 22, 2022 3:29 pmI'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.
So why don't you invest the extra $100k in the same funds in which you are already invested?
Would you DCA or lump sum?
Lump sum. Always.
Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
Just do it and stop worrying.
Oh, noooooo! I'm so sorry, it's the moops! The correct answer is 'the moops'.
manuvns
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Re: Where to invest $100k today?

Post by manuvns »

QQQ for $275 or less same for EFA at $57 or less , HYG for $72.35 or less
Thanks!
mnsportsgeek
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Re: Where to invest $100k today?

Post by mnsportsgeek »

I invested a good chunk of change near the top of the market last year. Do I regret it? A little. I opened my taxable account in October 2019 and my account is down 13% and dropping. Mostly because when I got a windfall, I invested it all at the top of the market. Still waiting to get back to the green. That's a little discouraging.

In hindsight, I should have DCA'd over the course of 12 months. I'd be lying if it isn't impacting my decision making a little now that I have another (much smaller) windfall to invest. Though I think I'm gonna do the same thing and dump it all in, cross my fingers, and hope we're at the bottom.
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ruralavalon
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Re: Where to invest $100k today?

Post by ruralavalon »

mnsportsgeek wrote: Fri Sep 23, 2022 1:03 pm I invested a good chunk of change near the top of the market last year. Do I regret it? A little. I opened my taxable account in October 2019 and my account is down 13% and dropping. Mostly because when I got a windfall, I invested it all at the top of the market. Still waiting to get back to the green. That's a little discouraging.

In hindsight, I should have DCA'd over the course of 12 months. I'd be lying if it isn't impacting my decision making a little now that I have another (much smaller) windfall to invest. Though I think I'm gonna do the same thing and dump it all in, cross my fingers, and hope we're at the bottom.
I too was stung by my first decision to lump sum a windfall all-at-once :) . But I continued to do that with later windfalls (bonuses, small inheritance), and it all worked out to the good :) .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
homebuyer6426
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Re: Where to invest $100k today?

Post by homebuyer6426 »

Consider including a Consumer Staples fund like VDC or FSTA. Going back to at least 1974, the staples sector has had both the highest returns and lowest volatility of any stock sector. The more you add, the more it reduces your max drawdown in a downturn, but without lowering your returns as bonds tend to do.
Glockenspiel
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Re: Where to invest $100k today?

Post by Glockenspiel »

I invested $100k that had grown in our checking accounts into VTSAX today. Seemed like a good time to buy on a down day.
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

Jack FFR1846 wrote: Fri Sep 23, 2022 9:21 am Open a taxable account with one of the "good" brokers who is giving money away to open an account. I'd guess Schwab is doing that. Put the entire amount in there. Once it's available to trade (it's next day with Schwab), buy all SCHB and then just think about where you "really" want it. How long to wait? I don't know...maybe a year. In the mean time, it's making market returns. If SCHB scares you, maybe get BND for bond security or VTI if you like Vanguard better than Schwab securities. I have both and feel they are exactly the same thing. Most important point is that while you're waiting, you're earning nothing and inflation is charging you money daily.
Thank you for your response. The only thing is - adding BND doesn't make me feel secure when it's down 14.47% YTD.
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

Glockenspiel wrote: Fri Sep 23, 2022 1:45 pm I invested $100k that had grown in our checking accounts into VTSAX today. Seemed like a good time to buy on a down day.
:sharebeer
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

homebuyer6426 wrote: Fri Sep 23, 2022 1:42 pm Consider including a Consumer Staples fund like VDC or FSTA. Going back to at least 1974, the staples sector has had both the highest returns and lowest volatility of any stock sector. The more you add, the more it reduces your max drawdown in a downturn, but without lowering your returns as bonds tend to do.
Thanks. My more complicated plan than 100% VTI was to add in a healthcare and select utilities fund to reduce volatility.
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

mnsportsgeek wrote: Fri Sep 23, 2022 1:03 pm I invested a good chunk of change near the top of the market last year. Do I regret it? A little. I opened my taxable account in October 2019 and my account is down 13% and dropping. Mostly because when I got a windfall, I invested it all at the top of the market. Still waiting to get back to the green. That's a little discouraging.

In hindsight, I should have DCA'd over the course of 12 months. I'd be lying if it isn't impacting my decision making a little now that I have another (much smaller) windfall to invest. Though I think I'm gonna do the same thing and dump it all in, cross my fingers, and hope we're at the bottom.
Thanks, appreciate your response and honesty.
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

manuvns wrote: Fri Sep 23, 2022 10:00 am QQQ for $275 or less same for EFA at $57 or less , HYG for $72.35 or less
Thanks!
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

JoeRetire wrote: Fri Sep 23, 2022 9:49 am
CAPRI wrote: Thu Sep 22, 2022 3:29 pmI'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.
So why don't you invest the extra $100k in the same funds in which you are already invested?

Thanks - my taxable account has too many funds in it, and lot of overlap. I'd like to simplify moving forward.
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

ruralavalon wrote: Fri Sep 23, 2022 9:45 am Welcome to the forum :D .

It's great to see that you are debt free, making use of tax-advantaged accounts, investing using very a diversified stock index fund and I-bonds.

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
CAPRI wrote: Thu Sep 22, 2022 8:22 pm Roth is 38.66% Target Date 2045 (FIOFX) and 61.34% S&P (FXAIX). Already maxed this year.
I suggest investing in a lump sum now. That has worked out best about 2/3 of the time.

If you are emotionally incapable of all-at-once then consider 50% now in a lump sum, and the other 50% at 10% per month for 5 months.

For stocks use a very diversified, very low cost fund like Vanguard Total Stock Market ETF (VTI). Consider adding some international stocks using a very diversified, very low cost fund like Vanguard Total International Stock ETF (VXUS).

What is your desired overall asset allocation (stock/bond mix)? What is your tax bracket both federal and state? Consider a very diversified, very low cost bond fund (a tax-exempt fund if in a high tax bracket.)

What is your tax filing status? (If married filing jointly consider an IRA for your spouse, or a another $10k in I bonds for your spouse.)
Thanks for your input. Seeing bonds so negative when they're supposed to be the volatility buffer make it hard to buy them.
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

mikejuss wrote: Fri Sep 23, 2022 9:26 am It's a great time buy. VTSAX and chill.
:sharebeer
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CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

Taylor Larimore wrote: Fri Sep 23, 2022 9:24 am
CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
CAPRI:

Welcome to the Bogleheads Forum!

Consider the many benefits of The Three-Fund Portfolio.

When you have decided your best asset-allocation using the Asset-Allocation link in the The Three-Fund Portfolio post, I would "lump sum." Bear markets offer an especially good opportunity to lump-sum.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "There may be better investment strategies than owning just three broad-based index funds but the number of strategies that are worse is infinite."
Thank you!
Ed 2
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Re: Where to invest $100k today?

Post by Ed 2 »

VTSAX and VXUS or VT to be simple. No one wants international now, so , there he is your chance to brag later with good returns. VT and chill.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
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Re: Where to invest $100k today?

Post by abuss368 »

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
Hi CAPRI -

You may want to consider talking with Vanguard Personal Advisor Services (PAS) for portfolio construction help. They are very low cost and provide a lot of value.

You may want to consider dollar cost averaging into the market over a period of tie rather than at once. This may help you stay the course and avoid making any irrational decisions. While time in the market is paramount, it may be best to implement a go slow approach.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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ruralavalon
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Re: Where to invest $100k today?

Post by ruralavalon »

CAPRI wrote: Fri Sep 23, 2022 6:10 pm
ruralavalon wrote: Fri Sep 23, 2022 9:45 am Welcome to the forum :D .

It's great to see that you are debt free, making use of tax-advantaged accounts, investing using very a diversified stock index fund and I-bonds.

CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
CAPRI wrote: Thu Sep 22, 2022 8:22 pm Roth is 38.66% Target Date 2045 (FIOFX) and 61.34% S&P (FXAIX). Already maxed this year.
I suggest investing in a lump sum now. That has worked out best about 2/3 of the time.

If you are emotionally incapable of all-at-once then consider 50% now in a lump sum, and the other 50% at 10% per month for 5 months.

For stocks use a very diversified, very low cost fund like Vanguard Total Stock Market ETF (VTI). Consider adding some international stocks using a very diversified, very low cost fund like Vanguard Total International Stock ETF (VXUS).

What is your desired overall asset allocation (stock/bond mix)? What is your tax bracket both federal and state? Consider a very diversified, very low cost bond fund (a tax-exempt fund if in a high tax bracket.)

What is your tax filing status? (If married filing jointly consider an IRA for your spouse, or a another $10k in I bonds for your spouse.)
Thanks for your input. Seeing bonds so negative when they're supposed to be the volatility buffer make it hard to buy them.
Boglehead investing is simple, but sometimes hard. "Simple" and "easy" are different things.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

abuss368 wrote: Fri Sep 23, 2022 7:51 pm
CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
Hi CAPRI -

You may want to consider talking with Vanguard Personal Advisor Services (PAS) for portfolio construction help. They are very low cost and provide a lot of value.

You may want to consider dollar cost averaging into the market over a period of tie rather than at once. This may help you stay the course and avoid making any irrational decisions. While time in the market is paramount, it may be best to implement a go slow approach.

Best.
Tony
Thanks, Tony. I talked with Vanguard PAS and know what their construction would be. I'm having a hard time with going in on more international and bonds.
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Re: Where to invest $100k today?

Post by abuss368 »

CAPRI wrote: Sat Sep 24, 2022 8:56 am
abuss368 wrote: Fri Sep 23, 2022 7:51 pm
CAPRI wrote: Thu Sep 22, 2022 3:29 pm Hi all - I have $100k to invest (inherited) and have done lots of research, talked to several financial advisors, but am still gun shy about putting this much in the market and which funds or ETF to buy, especially with all the volatility and negative news. Is VTI enough, or do I need to add in some other funds to be more diversified. International funds and bonds do not look attractive right now at all. I'm 39 years old, have no debt, no kids, house is paid off, already maxing out 401k, Roth IRA, have 1 year emergency fund, $10k in I bonds, and will not need the money for at least 10 years.

Thoughts on options: 100% VTI OR: 56 VOO /15 VOE/ 5 VOO /12 FSUTX/ 12 FSHCX

Would you DCA or lump sum?

Hoping to feel at ease with how to move forward and stop agonizing. I appreciate your advice!
Hi CAPRI -

You may want to consider talking with Vanguard Personal Advisor Services (PAS) for portfolio construction help. They are very low cost and provide a lot of value.

You may want to consider dollar cost averaging into the market over a period of tie rather than at once. This may help you stay the course and avoid making any irrational decisions. While time in the market is paramount, it may be best to implement a go slow approach.

Best.
Tony
Thanks, Tony. I talked with Vanguard PAS and know what their construction would be. I'm having a hard time with going in on more international and bonds.
I would consider revisiting that conversation with them. My understanding is there is a range they may recommend.

Best.
Tony
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Re: Where to invest $100k today?

Post by Vanguard User »

I would lump sum all of it into VTSAX taxable.
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CAPRI
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Re: Where to invest $100k today?

Post by CAPRI »

Vanguard User wrote: Sat Sep 24, 2022 2:36 pm I would lump sum all of it into VTSAX taxable.
Thank you for your response. I sure like the simplicity.
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Re: Where to invest $100k today?

Post by bh1 »

Recently had a similar "problem". Like, yesterday? I didn't go for the idea that I had to put it all in one place. We chose about 1/3 in VT and 2/3 in money market for now. If we decide we don't need the money soon for something impulsive, then we will probably move that 2/3 into some fraction of a TIPS fund and the rest in VT.

In other words, just because it isn't retirement money doesn't mean that you can't have an AA. The sooner you need it, the more "fixed income" you have. No one can tell you what AA you should have; you just have to gut feel it.
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Re: Where to invest $100k today?

Post by Vanguard User »

CAPRI wrote: Sat Sep 24, 2022 3:13 pm
Vanguard User wrote: Sat Sep 24, 2022 2:36 pm I would lump sum all of it into VTSAX taxable.
Thank you for your response. I sure like the simplicity.
Yup. This forum is all about that.
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Re: Where to invest $100k today?

Post by WhiteMaxima »

Cash. there is will be big sale in 2023.
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Re: Where to invest $100k today?

Post by Moe Sanders »

Dollar cost average into either VTSAX or VFINX within a 5 year time frame. Just my two cents.
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Re: Where to invest $100k today?

Post by NewbieBogle007 »

I'm a bit surprised at all the lump sum advice when the market has literally dropped with every fed rate hike - like clock work. I'd be interested to hear why you lump summers think there isn't an obvious pattern here...
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Re: Where to invest $100k today?

Post by strummer6969 »

Perspectives

Lump sum: This method produces better returns 2/3rds of the time per the Vanguard paper (you can find the link if you dig around). I would imagine that the 1/3rd of the time when it doesn't is when the lump sum occurs at the tail end of a bull market or very early into a bear market.

DCA: If you're already gun shy and will panic if the market drops another 15-20%, for example, DCA might be better for you. You may also miss out if the market shoots up 15-20% from here while you are DCA'ing (not that I'm expecting it but anything is possible).

You'll find that lots of people here have various agendas and biases. Don't feel pressured to invest all of it in VTSAX (VTI). An international allocation is recommended by Vanguard and just about any investment advisor I've talked to. But, admittedly, international has performed poorly in recent periods, and may continue to do so while the dollar is relatively strong. You'll find many differing opinions on investing in international stocks. I would suggest making an informed decision about it before you invest, so you don't move in and out of it at inopportune times.
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Re: Where to invest $100k today?

Post by arcticpineapplecorp. »

WhiteMaxima wrote: Sat Sep 24, 2022 8:05 pm Cash. there is will be big sale in 2023.
big sale in 2023 in what asset class?

when will the sale be exactly?

what amount of the sale will it be?

how many other fire sales have you predicted?

can you show us when you made your predictions before they came true?
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Re: Where to invest $100k today?

Post by WhiteMaxima »

arcticpineapplecorp. wrote: Sat Sep 24, 2022 10:04 pm
WhiteMaxima wrote: Sat Sep 24, 2022 8:05 pm Cash. there is will be big sale in 2023.
big sale in 2023 in what asset class?

when will the sale be exactly?

what amount of the sale will it be?

how many other fire sales have you predicted?

can you show us when you made your predictions before they came true?
I think the worst yet to come. Top to bottom 50% is my baseline. Could be better or worse. As of today, broad market has already dropped 20%. fed is going to continue raise interest rate and QT has just begun. Inflation has already eaten away my pension by 20%. Fed must do whatever take to control the inflation.
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Re: Where to invest $100k today?

Post by UncleLeo »

Ed 2 wrote: Fri Sep 23, 2022 6:18 pm No one wants international now, so , there he is your chance to brag later with good returns.
Maybe they have a good reason.
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Re: Where to invest $100k today?

Post by cbs2002 »

NewbieBogle007 wrote: Sat Sep 24, 2022 8:27 pm I'm a bit surprised at all the lump sum advice when the market has literally dropped with every fed rate hike - like clock work. I'd be interested to hear why you lump summers think there isn't an obvious pattern here...
Because people here don't care about what happens after the next rate hike. Lump sum investing has performed better over decades, and that's what matters.

If DCA helps you sleep, fine. And in the long run, will DCA vs. lump make the biggest difference? Hardly. But if you fear seeing short-term paper losses during times like now, that's more about the psychology of investing a person has to reckon with, not what is financially optimal.

OP: at your age and with your lack of family obligations, I'd still be 100% equities, lump sum all the way. Maybe buy yourself something nice first - I know, very non-Boglehead thing to say.

My answer would be different if you were looking to retire or dial back work, in which case I'd recommend adding some shorter-term bonds.
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Re: Where to invest $100k today?

Post by CAPRI »

cbs2002 wrote: Sun Sep 25, 2022 7:33 am
NewbieBogle007 wrote: Sat Sep 24, 2022 8:27 pm I'm a bit surprised at all the lump sum advice when the market has literally dropped with every fed rate hike - like clock work. I'd be interested to hear why you lump summers think there isn't an obvious pattern here...
Because people here don't care about what happens after the next rate hike. Lump sum investing has performed better over decades, and that's what matters.

If DCA helps you sleep, fine. And in the long run, will DCA vs. lump make the biggest difference? Hardly. But if you fear seeing short-term paper losses during times like now, that's more about the psychology of investing a person has to reckon with, not what is financially optimal.

OP: at your age and with your lack of family obligations, I'd still be 100% equities, lump sum all the way. Maybe buy yourself something nice first - I know, very non-Boglehead thing to say.

My answer would be different if you were looking to retire or dial back work, in which case I'd recommend adding some shorter-term bonds.
Thank you! I upgraded to business class at the gate on a recent flight to Europe. That was my 'buy myself something nice" equivalent. :)
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Re: Where to invest $100k today?

Post by ruralavalon »

WhiteMaxima wrote: Sat Sep 24, 2022 8:05 pm Cash. there is will be big sale in 2023.
You are probably right. But there is now a big sale. Which will be a bigger sale, and by how much? I don't know.

CAPRI wrote: Sun Sep 25, 2022 10:00 am
. . . . .

Thank you! I upgraded to business class at the gate on a recent flight to Europe. That was my 'buy myself something nice" equivalent. :)
In my opinion buying something nice is always a reasonable choice for part of the lump sum for anyone who is already on track for their goals.
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Re: Where to invest $100k today?

Post by arcticpineapplecorp. »

WhiteMaxima wrote: Sun Sep 25, 2022 12:17 am
arcticpineapplecorp. wrote: Sat Sep 24, 2022 10:04 pm
WhiteMaxima wrote: Sat Sep 24, 2022 8:05 pm Cash. there is will be big sale in 2023.
big sale in 2023 in what asset class?

when will the sale be exactly?

what amount of the sale will it be?

how many other fire sales have you predicted?

can you show us when you made your predictions before they came true?
I think the worst yet to come. Top to bottom 50% is my baseline. Could be better or worse. As of today, broad market has already dropped 20%. fed is going to continue raise interest rate and QT has just begun. Inflation has already eaten away my pension by 20%. Fed must do whatever take to control the inflation.
how can inflation have eaten away at your pension by 20% if inflation is 8%-9%??
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Re: Where to invest $100k today?

Post by WhiteMaxima »

arcticpineapplecorp. wrote: Sun Sep 25, 2022 11:47 am
WhiteMaxima wrote: Sun Sep 25, 2022 12:17 am
arcticpineapplecorp. wrote: Sat Sep 24, 2022 10:04 pm
WhiteMaxima wrote: Sat Sep 24, 2022 8:05 pm Cash. there is will be big sale in 2023.
big sale in 2023 in what asset class?

when will the sale be exactly?

what amount of the sale will it be?

how many other fire sales have you predicted?

can you show us when you made your predictions before they came true?
I think the worst yet to come. Top to bottom 50% is my baseline. Could be better or worse. As of today, broad market has already dropped 20%. fed is going to continue raise interest rate and QT has just begun. Inflation has already eaten away my pension by 20%. Fed must do whatever take to control the inflation.
how can inflation have eaten away at your pension by 20% if inflation is 8%-9%??
My pensions are not inflation adjusted. my baseline is 2% inflation and now it is 8.9%. And I don't think 2% inflation goal is achievable. 3-4% may be.
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Re: Where to invest $100k today?

Post by Ed 2 »

UncleLeo wrote: Sun Sep 25, 2022 1:47 am
Ed 2 wrote: Fri Sep 23, 2022 6:18 pm No one wants international now, so , there he is your chance to brag later with good returns.
Maybe they have a good reason.
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Re: Where to invest $100k today?

Post by LadyGeek »

No member easybutton has a question which I've moved into a new thread. See: $100k to invest - What should I do?
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Re: Where to invest $100k today?

Post by Wiggums »

We hold 100% VTSAX in Roth because that space is so valuable.

We hold the three fund portfolio plus municipal bonds overall.

Lump-sum or DCA over a short period. Either is fine.
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Re: Where to invest $100k today?

Post by like2read »

So there you have it, the many opinions above say....definitely lump sum, or dollar cost average! 😂

I suppose if you believe in the wisdom of crowds, you might do like someone above suggested, and lump sum 50% now with the rest dollar cost average.

Catching the absolute bottom of the downdraft is extremely challenging. If you're trying to guess where the bottom is, I would think we're in a better neighborhood now, certainly, than we were at the end of last year.

If you'd like to spread your bets.... Last time I had this challenge, I broke the amount into thirds, and took the plunge each time a down day came along. We do appear to be in a time of high volatility, both up and down. YMMV.

Agree with the choices others have suggested above. I would go with either three fund, two fund or one fund, All reasonable, dependent upon your risk profile. All three are cheaper than last year.

l2r
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