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All or some?
Old 04-18-2007, 08:33 AM   #1
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All or some?

I know this has been discussed before but now I have to deal with the issue directly and find myself waffling. DW just liquidated a large rollover IRA held in load funds and transferred it to Vanguard where it went into their Prime Money Market yesterday. It got liquidated at a fairly high level last week; in the meantime prices have gone up another percent or so. We have the VG funds and percentages picked out but now face the question of invest it all today, half today, drip in over a brief period,...? In volatile times like this the market often drops a percentage point or so after a run-up like the past several days but it could just keep rising. Wait for a drop, bite the bullet,?
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Re: All or some?
Old 04-18-2007, 08:45 AM   #2
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Re: All or some?

When I did this last year, I invested the money in six equal installments over a 6 month period. Yes, it gives you a very conservative portfolio for 6 months, but I DCA with my other savings and wanted to do the same.

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Re: All or some?
Old 04-18-2007, 09:07 AM   #3
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Re: All or some?

If the funds you transfered from were invested in equities then I would lump sum into Vanguard. If you are going from bonds or a mix, to all equities I would DCA over 6 to 12 months.
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Re: All or some?
Old 04-18-2007, 09:51 AM   #4
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Re: All or some?

I am faced with the same thing. With RE in a month we are looking for some Vanguard funds to use to park some of the cabin equity in for 3-4 years. I have not taken the time to really dig into it so I have "parked" about $150k in the MM for now until I find some interesting funds to stick it in (balanced of course!)

Once w*rk issues and 12 hour days are gone I will have more time to do some solid research. Until then, it stays there unless some of you Vanguard Die Hards have a few good selections to save me some time.

DCA in the current market seems prudent.
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Re: All or some?
Old 04-18-2007, 10:02 AM   #5
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Re: All or some?

You are correct - This has been discussed before.

http://early-retirement.org/forums/i...hp?topic=310.0

Personally, I would do it all at once if a large portion of your allocation is bonds/fixed income
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Re: All or some?
Old 04-18-2007, 10:04 AM   #6
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Re: All or some?

Quote:
Originally Posted by donheff
I know this has been discussed before but now I have to deal with the issue directly and find myself waffling. DW just liquidated a large rollover IRA held in load funds and transferred it to Vanguard where it went into their Prime Money Market yesterday. It got liquidated at a fairly high level last week; in the meantime prices have gone up another percent or so. We have the VG funds and percentages picked out but now face the question of invest it all today, half today, drip in over a brief period,...? In volatile times like this the market often drops a percentage point or so after a run-up like the past several days but it could just keep rising. Wait for a drop, bite the bullet,?
Isn't it an issue of what equity exposure you want in your TOTAL portfolio? Unless you are doing a major asset allocation rebalance, wouldn't you want the same equity exposure across your TOTAL portfolio as you had before she liquidated? Otherwise, IMO, you are playing a market timing game.
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Re: All or some?
Old 04-18-2007, 10:11 AM   #7
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Re: All or some?

Faced with this last year I did some reading but can't find the link that convinced me. Bottom line was if you are investing IN to either fixed income or the same asset class that the money came from, lump sum in. If you are reallocating this money to equities of a different asset mix, DCA over 6-12 months.

It was less a matter of which worked out better financially than it was about sustaining the risk exposure you had tolerated prior to the big transfer.
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Re: All or some?
Old 04-18-2007, 10:54 AM   #8
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Re: All or some?

Thanks for the suggestions so far. I am basically staying in the same allocation - just moving to a more efficient set of funds. I want to get it all invested quickly (e.g. within a few days) but I'm vacillating over whether to go all today, or 50% today waiting for a possible drop tomorrow. I know it is a random crap shoot when talking about a few days. And I know it won't really matter in the long run. But when plunking down $500K a day's difference could pay for a trip - or cancel one So I figure I will vacillate with all of you and then just do something. Maybe a coin toss?
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Re: All or some?
Old 04-18-2007, 11:29 AM   #9
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Re: All or some?

Quote:
Originally Posted by donheff
Thanks for the suggestions so far. I am basically staying in the same allocation - just moving to a more efficient set of funds. I want to get it all invested quickly (e.g. within a few days) but I'm vacillating over whether to go all today, or 50% today waiting for a possible drop tomorrow. I know it is a random crap shoot when talking about a few days. And I know it won't really matter in the long run. But when plunking down $500K a day's difference could pay for a trip - or cancel one So I figure I will vacillate with all of you and then just do something. Maybe a coin toss?
If it were me I would do it ASAP.

You have an asset allocation right now -- before you buy the other Vanguard funds -- which includes, in part, a $500K in MM accounts.

After your planned investment, you will have a different asset allocation.

You have already decided that you want the "after" asset allocation. So why would you hold on to the "before" allocation?

If you're hoping for a market dip to pay for a vacation, remember that the odds that the market is going up tomorrow are greater than the odds of it dropping.

If you want to bet against those odds IMHO you're making a poor gamble.

2Cor521
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Re: All or some?
Old 04-18-2007, 02:23 PM   #10
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Re: All or some?

Well, its all in good or bad. Thanks for the free psychotherapy.
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Re: All or some?
Old 04-18-2007, 03:32 PM   #11
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Re: All or some?

A data point: Each spring I travel away for a week or so and so. The actual week varies from year to year, but without fail for the last 8 years, the stock market has dropped at least a few percent while I am gone. I am going away next week.

FWIW, we just rebalanced 3% of portfolio out of equities into fixed income at the close today.
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Re: All or some?
Old 04-18-2007, 03:40 PM   #12
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Re: All or some?

Quote:
without fail for the last 8 years, the stock market has dropped at least a few percent while I am gone. I am going away next week
... on the other hand, i just "trimmed" my equities to rebalance, and without fail, whenever i sell, ...
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