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01-27-2013, 04:45 PM
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#1
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Recycles dryer sheets
Join Date: Dec 2010
Posts: 445
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when to dive
We have some investments that have matured recently so have a notable sum to invest in mutual funds as we approach our desired 50/50 AA. But with the market doing SO well, should we pick an amount of time to wait to see if there is a correction? I know enough not to try to market-time, but still, buying at the peak seems a bit imprudent.
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01-27-2013, 05:00 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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How about DCAing in over 6 to 12 months?
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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01-27-2013, 05:02 PM
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#3
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Full time employment: Posting here.
Join Date: Nov 2008
Posts: 728
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Invest over a matter of months. Let's say you have $50,000......invest 5k a month OR if the market turns down, double up, invest 10k that month.
This works for me but you should talk to a pro because I'm not competent to give advice. I'm doing the same, have for years.....I don't know when the market will go up or down so I buy a little more when it's cheaper......good luck
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01-27-2013, 05:02 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by brewer12345
How about DCAing in over 6 to 12 months?
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+1
No need to dive, wade in gradually.
__________________
Numbers is hard
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01-27-2013, 06:37 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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How do we know the market (I'm assuming equities not bonds) has peaked? If you DCA you can DCA on the way up or the way down. Does it really matter if you invest now? It appears that it is more a matter of comfort level than actual investment return probablity. If you need X to reach your desired AA and ISP then now is the time. Hopefully your thinking long term.
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Took SS at 62 and hope I live long enough to regret the decision.
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01-27-2013, 06:55 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,364
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I would value average in over 6 to 12 months. Value averaging is slightly better than DCA in that you invest more when the market is relatively lower and less when the market is relatively higher.
So let's say you have S50k and want to invest over 10 months, then the ending balances would be $5k,$10k,$15k, $20k et al for months 1, 2, 3, 4. et al. Invest $5k. Then a month later invest an additional amount to bring the balance to $10k, Ditto the next month to bring your balance to $15k. Repeat until the whole $50k is invested.
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If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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01-28-2013, 09:00 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,364
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__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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01-28-2013, 09:12 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2008
Posts: 13,143
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Quote:
Originally Posted by palomalou
We have some investments that have matured recently so have a notable sum to invest in mutual funds as we approach our desired 50/50 AA. But with the market doing SO well, should we pick an amount of time to wait to see if there is a correction? I know enough not to try to market-time, but still, buying at the peak seems a bit imprudent.
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DCA the amount.
1) Set a time you want to get to the 50/50 AA.
2) Divide the amount to invest by the total of months
3) Invest the amount from #2 above each month
Simple as 1,2,3.
No time like the present to start as if you wait for the perfect time, you may be waiting..and waiting..and waiting as there is no real perfect time.
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
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01-28-2013, 01:58 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
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Quote:
Originally Posted by easysurfer
DCA the amount.
1) Set a time you want to get to the 50/50 AA.
2) Divide the amount to invest by the total of months
3) Invest the amount from #2 above each month
Simple as 1,2,3.
No time like the present to start as if you wait for the perfect time, you may be waiting..and waiting..and waiting as there is no real perfect time.
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I totally agree, with 1 little addition...if you see a decent dip in prices during any of those DCA months, there is no harm in doubling up for that month and shortening the total number of months by 1.
I did this with VHDYX in March 2009. I'd been eyeballing the fund for months. I was going to do a standard VG account opening with the minimal amount required, and set up automatic DCA for 12 months.
When I looked at the market conditions, I not only opened the account, but threw in the equivalent of 6 months DCA, all in 1 fell swoop. Then I set up 6 more months of DCA and left it on autopilot.
DMT or a Carpe Diem moment ?
You decide....
Look at the 5 year performance chart for this fund. I just plain lucked out!
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"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
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01-28-2013, 09:52 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Sep 2007
Posts: 1,214
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There have been innumerable studies done on this subject. Financially, the best method is to invest the entire lump sum immediately.
DCA'ing is more emotionally comfortable, but financially worse.
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01-29-2013, 09:03 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2008
Posts: 13,143
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Quote:
Originally Posted by rayvt
There have been innumerable studies done on this subject. Financially, the best method is to invest the entire lump sum immediately.
DCA'ing is more emotionally comfortable, but financially worse.
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I wonder if the studies take into the account the folks who invest the entire lump sum, then get cold feet and bail out or if the studies were more a what if in that if one was to put in a lump sum and not touch the amount.
http://lazytraders.com/insights/dca-...nce-investing/
try the free tool:
http://www.moneychimp.com/features/dollar_cost.htm
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
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