Originally Posted by ARB57
market timing is evil, BUT, I'm at 20% equities and would like to get to 35-40%. Would you take the plunge TODAY and get the equity position up to your allocation target (with the S&P at the top of it's recent trading range,) or wait for a pullback. If it were YOU...what what you do?
Retired...mid-fifties. No pension. Shouldn't need the equity money for several years.
I'll be a bit of contrarian and say do it now or at least 1/2 of it now.
To me a mid 50s retiree with no pension and 20% equity AA is as almost as a dangerous AA, as 75+ year old with near 100% equity position. There is certainly a possibility that January effect
will be in force this year and if you DCA over the next 6 months you'll have missed a 10+% move.
On a practical level lets say you put 1/2 the money into several ETFs between now and the end of the year. If next Dec the market is down you can sell your losers and take the tax loss in 2012, if on the other hand you have one big winner that you think is over valued you have flexibility of still getting a long term capital gain in 2012 or 2013. Dec trades really help with minimizing taxes.