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55 Divorced Female Investment Advise Needed!
Old 02-04-2016, 03:38 PM   #1
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55 Divorced Female Investment Advise Needed!

55 Single divorced Female looking to start investing with 10 year time horizon. $350k cash....small 401k and just started a Roth. No pension and a limited SS history. Given the complex nature of this market....how would you suggest I start to put some of my savings to work given my 10 year horizon. Was thinking of putting 100k to work. Do I dollar cost average over the next 12 months?
As for investments I was thinking of one of the following:
3 Fund Lazy Portfolio
Schwab Intelligent Portfolio
Target 2025 Retirement Fund
Wellington Fund

I was thinking a 40/60 AA. Your thoughts?




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Old 02-04-2016, 03:45 PM   #2
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Tangent: You say limited SS history. Were you married for 10 years (and, what type of SS history does ex have)? You may be better off than you think, assuming no remarriage on your part.
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Old 02-04-2016, 03:55 PM   #3
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Following the KISS principle, 3 fund lazy portfolio with at least a 50/50 AA but since you have 10 years maybe 60/40 or 70/30 if you can leave it alone when volatility rears it's ugly head.

Or the target fund.
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Old 02-04-2016, 03:58 PM   #4
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If you are really not going to touch the money for 10 years I'd be putting almost all of it to work in the market right away. Then, maybe at year 5 start gradually shifting the AA out of stocks.

What makes you consider only "putting to work" less than a third of you assets?

Dollar cost averaging over a year is fine. I'd personally do it in 6 months. That's plenty long.

But then I'm pretty aggressively pro stocks.
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Old 02-04-2016, 04:04 PM   #5
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This volatility scares me if I were to dump all or large sums in at once...thus was thinking DCA over the next 12 months...if things turn really ugly I could always dump more in to shorten that timeline......does that make sense?
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Old 02-04-2016, 04:18 PM   #6
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Even if the market tanks this year, you have 10 years to recover and then some.

On the other hand, you do say "volatility scares me", so if you are someone who would panic and sell if the market spikes down, then maybe putting everything into like the Wellington fund (like you mentioned) would be wiser for you.

Also, I'm assuming your "10 year time horizon" means that that after 10 years you will start tapping into it, not spend it all right then. So for most of your money, that horizon if even further off.
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Old 02-07-2016, 09:33 AM   #7
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Quote:
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Tangent: You say limited SS history. Were you married for 10 years (and, what type of SS history does ex have)? You may be better off than you think, assuming no remarriage on your part.
Yes that was my immediate thought as well. The OP should double check the SS benefit she will get.

With $350k and what sounds like a sensible approach the OP is starting out well.

I would put more than "$100k to work". I would open a Vanguard account and set up a lazy 3 fund portfolio of Total Stock Market, Total Bond Market and Total International. Now is as good a time as any to invest your money. I would also look at using some money to buy real estate if you don't already own a home.
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Old 02-07-2016, 10:28 AM   #8
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This volatility scares me if I were to dump all or large sums in at once...thus was thinking DCA over the next 12 months...if things turn really ugly I could always dump more in to shorten that timeline......does that make sense?
Makes total sense.
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Old 02-07-2016, 10:55 AM   #9
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Quote:
Originally Posted by macav933 View Post
55 Single divorced Female looking to start investing with 10 year time horizon. $350k cash....small 401k and just started a Roth. No pension and a limited SS history. Given the complex nature of this market....how would you suggest I start to put some of my savings to work given my 10 year horizon. Was thinking of putting 100k to work. Do I dollar cost average over the next 12 months?
As for investments I was thinking of one of the following:
3 Fund Lazy Portfolio
Schwab Intelligent Portfolio
Target 2025 Retirement Fund
Wellington Fund

I was thinking a 40/60 AA. Your thoughts?...
A 40/60 AA would be more Wellesley than Wellington. Why put only $100k to work if you have $350k in cash?

In any event, I would value average in whatever you want to invest over a stated period. For example, if you wanted to invest $100k over 10 months, invest $10k to begin. A month later add whatever you need to to bring your balance to $20k.A month later add whatever you need to to bring your balance to $30k. Repeat until the $100k is invested. You'll end up investing more when the markets are relatively lower and less when they are relatively higher. Slightly better than DCA, which would be a simple $10k a month.

On volatility.... just don't look and volatility will not bother you a bit.
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Old 02-07-2016, 01:32 PM   #10
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40% of your $350K would be $140K for equities. Not too much for you. I would use 3 lazy index funds, and Vanguard would be a fine place due to low fees, or Fidelity. On the DCA, go with the shortest period you can stand, perhaps 6-10 months.
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