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So, here I am
Old 12-18-2015, 06:57 PM   #1
Recycles dryer sheets
sheldon cornped's Avatar
 
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So, here I am

Officially retired on MLK day this past Jan. (free at last), sold our house, moved to where our daughter is so we can help with new grandbaby while daughter completes nursing school. Will relocate to PNW, probably Oregon in July, 2016.
Life has been good thus far. I just did roll over my 31 year old 401k on 12/9 and it has been in the new rollover account since this Tuesday. I am traditionally not a market timer, but with this weeks continued volatility we find ourselves ahead of the game with the recent drop and low 7 figure dry powder compared to when it cashed out. Question. Would you plow back into the market all at once with the typical AA of 60/40 or 50/50. We don't need the tax deferred income for at least 2 years, or might you dollar cost average back in? I know we can't make predictions about what the market will do, but I feel pretty good right now in this position. I guess my question is when would you redeploy at this stage?
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Old 12-18-2015, 07:32 PM   #2
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That's always the issue when you get out of the market - when to get back in and how.

I don't have any advice for you on AA, but mine is at 60/40.

In a similar situation, I've bought into equities within a short time-frame - say 3 months. It just makes me feel better if equities fall during that time, and not so bad if equities rise. Just make sure that distributions have already been made on any funds you're going to invest in right now.
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Old 12-19-2015, 03:43 PM   #3
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I'd tend toward the DCA, myself.
And start it in January to be clear of dividend distributions.
Good luck!
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Old 12-19-2015, 04:16 PM   #4
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I'm facing a similar situation but on a smaller scale in that I just rolled over my ex-employer DC plan which is about 10% of my nestegg into my IRA and have cash sitting there. One argument is that if you were happy where it was fully invested 10 days ago then why would you change? If you were not hankering to change then you should just jump right back in.

As for me, I put about 30% of it back in yesterday at a tidy profit compared to 11/30 (pure luck) and will probably buy on dips over the next 30 days or so with the rest.

Sarah, since the OP's money is in a tax-deferred account how would dividend distributions come into play?

If you really wanted to you could value average it in over a certain period.

No right answer IMO.
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Old 12-20-2015, 10:49 AM   #5
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I will be in a similar situation. I plan to roll over my 403b into an IRA after the new year. I currently have a 50/50 AA. My plan is to immediately reinvest to a 50/50 AA.

The idea of holding off, have the market crash, and then reinvest sounds good. However, with my luck the market would explode and I would be on the outside looking in.
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Old 12-20-2015, 11:02 AM   #6
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We're heading into presidential silly season with an upcoming election. I know buying in directly to my asset allocation is the right thing to do, but if it was me I would DCA in over the next 18 months or so. Too much market advice from too many bears has scared me. It's a good thing I'm already invested, so I'm staying the course.
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Old 12-20-2015, 11:18 AM   #7
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When investing large lump sums of cash, I prefer DCA because it tends to smooth things out a bit. You won't be investing all it on the worst day, or on the best day either. Lots of people prefer DVA but to me DCA is easier to do, and the difference overall does not seem huge.

I put my money where my mouth is when I sold my paid off house last August. I re-invested the proceeds via DCA, although only over five months. The very last of it will be taken care of at the beginning of January, when I do my rebalancing.
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Old 12-20-2015, 11:56 AM   #8
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I agree but there is a nuance of a difference from new money in your case and essentially just a transfer from one account to another like in our cases. I would value average in new money but a transfer is a little different kettle of fish.
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Old 12-20-2015, 04:55 PM   #9
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I'm rolling over DW's 401k 10% at a time just to avoid being out of the market.

When I can't avoid the problem, I buy back 100% as long as it is at a lower price than when I had to sell. I figure that's a win making money on a transfer. If that's not possible, or the amount is really big, then it's a quick DCA, like over one week. That gets me back in, but gives me a little time to wait for lower prices.

If DCA was all that great I'd take all my money out at the end of each month and DCA back in during the following month, repeating the process every month.
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Old 12-20-2015, 09:02 PM   #10
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I can't add much to your investment dilemma but am looking forward to the arrival of a new Duck or Beaver. Do PM me when you are ready to plan the move.
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Old 12-21-2015, 11:34 AM   #11
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Thanks for the insights and thoughts. I look forward to being in more of a set it and forget it stage with maybe some tweaks and rebalancing. Right now we are leaning more toward Duckville than Beaverville, though both places are on the radar. Thanks for the welcoming!!
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