Mysto said:
Having said that I find it hard to invest all of my funds during record highs in many areas. The math says I should, my gut just won't let me commit 100% plus some funds are still being xfered from other sources and I'll invest as that finishes. Remember the arguments against DCA state that only if you invested right before a major market turndown (well I am good at getting in just before a major market turndown).
You have to decide whether you're an asset allocator or a dirty market timer. One or the other-- not both.
Sea story time.
At the end of April we sold Tweedy, Browne Global Value-- bloated, high expense ratio, seemingly at the top of the market-- to purchase an international ETF (PID). When Jim Cramer the market discovered that we'd sold, Tweedy immediately zoomed from $29 to $29.50. When the market discovered that we were getting ready to buy PID with the proceeds, PID also zoomed from $16.50 to over $17.
Because PID doesn't have a lot of daily share volume and we were doing it among four different IRA accounts, every trading day or so I'd buy a tiny fraction of its daily volume. We were steadily buying it for most of May as the price dropped from $17 to below $16.50. So clearly our tactic of buying a little every day wasn't driving up the share price!
By the middle of June Tweedy was at $26.57, 8% below our selling price. We were brilliant! Unfortunately by the end of June PID was at $15.67, also 8% below most of our purchases.
Last Friday, only three months later, all of that was irrelevant. Tweedy closed at $29.51 and PID closed at $17.22, both a couple percent higher than our sale/purchase prices. What's really important is that we exchanged a 1.38% expense ratio for a 0.6% expense ratio, which is paying off quite well this year and every year afterward. We've already made back our transaction costs and, with a low-cost asset allocation plan in place, we don't have to worry what those bozos the market is going to do next.
You could do a lot worse than plunking everything into Wellington & Wellesley. You might kick yourself for a few weeks after you make the purchase, but a few months from now it won't be relevant.
If it's just going to bug the heck out of you then do it over a few months-- but just do it.