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Some advice please
Old 06-24-2014, 02:10 PM   #1
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Some advice please

I am 39 yrs old and have around 900k in this record high market. I saved diligently until the market crash and then worked double time during the crash to keep socking it away. It paid off except I stopped. Once the market kept creeping up I foolishly tried to time it (actually was just afraid like many folks) thinking we were having artificial highs and stopped investing. I invest primarily in index funds at about 85:15......the problem is that now I have about 300k in money markets bc I have been afraid to invest. I keep thinking I can't put it in now that we're at a record high bc it can only go down......then a month later we've jumped 50 more points. I'm frustrated with myself for abandoning the fundamentals that have served me well in the past. What do I do with 300k cash? I'm pretty frugal and have about 3k per month in passive income and hope to pull the ER trigger in the next 2-3 years. I'd like to keep an aggressive portfolio as I shouldn't need to touch it for 20 years or more, but who knows.......any advice is appreciated



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Old 06-24-2014, 02:14 PM   #2
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Old 06-24-2014, 02:20 PM   #3
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Take a look at this thread and pay special attention to the excellent advice in this link: Missed the big market rally? Here's what to do now. | The Big Picture
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Old 06-24-2014, 05:02 PM   #4
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Consider the money market and cash as part of your fixed income. It appears that you cannot really invest at an 85:15 asset allocation when you have a million dollars, but you can invest at 66:33 (or is that 75:25?). Either is a perfectly acceptable asset allocation. At least you haven't sold equities.

I would take the cash and buy a short-term bond fund myself. But once you re-write your investing policy statement to reflect your new-found asset allocation plan, you will be good to go.

In other words, your actions say one thing and your words say another. I'd go with your actions on this one.
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Old 06-24-2014, 05:13 PM   #5
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No one can predict the future. I'd decide on an asset allocation and then invest 1/24th of your money each month for the next 24 months. If the market goes up, you win, if it goes down or corrects, you lose less. The challenge is NOT investing or plunking everything down just as it drops. I've bought in every month with a small amount of money for the past 18 years......I sleep at night and have done well over the years. good luck
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Old 06-24-2014, 06:37 PM   #6
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Lot's of folks would love to have 600K in the market, along with 300 large in cash. You have to have money at the bottom to buy at the bottom. Be happy and wait.
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Old 06-25-2014, 01:16 AM   #7
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Decide what your target AA is and what needs to go into the market. Pick a timeframe to get there. Divide the amount that needs to go in the market by the timeframe and invest regularly.

For example, let's say you have million and want an AA of 85/15 so your MM should be 150 rather than 300 so you need to transition 150 to equities and you want to do it over 15 months. Move $10k to equities each month until you are 85/15.
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Old 06-25-2014, 06:21 AM   #8
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Originally Posted by pb4uski View Post
Decide what your target AA is and what needs to go into the market. Pick a timeframe to get there. Divide the amount that needs to go in the market by the timeframe and invest regularly.

For example, let's say you have million and want an AA of 85/15 so your MM should be 150 rather than 300 so you need to transition 150 to equities and you want to do it over 15 months. Move $10k to equities each month until you are 85/15.
+1

Since you are currently not following your own investment policy, think twenty times about taking a new sort of action. Go take a walk, read bogleheads.org. Or better yet, take another walk.

Specifically: Be aware that not buying during up markets can be as hard as not selling during down markets.

I am suffering from a few regrets myself right now in the same lines as you. But then again .. too few to mention
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Old 06-25-2014, 08:40 AM   #9
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Agree with others that you are risk averse hence you should lower your stock investments but more importantly stop listening and reading about how the stock market will crash soon (seems like a daily ritual to publish this crap on CNBC.com and Marketwatch.com.)

You may want to tilt to small cap value, as Larry Swedroe as done. Google the "Larry Portfolio" and read about that.
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Old 06-25-2014, 09:38 AM   #10
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Originally Posted by Scout View Post
I am 39 yrs old and have around 900k in this record high market. I saved diligently until the market crash and then worked double time during the crash to keep socking it away. It paid off except I stopped. Once the market kept creeping up I foolishly tried to time it (actually was just afraid like many folks) thinking we were having artificial highs and stopped investing. I invest primarily in index funds at about 85:15......the problem is that now I have about 300k in money markets bc I have been afraid to invest. I keep thinking I can't put it in now that we're at a record high bc it can only go down......then a month later we've jumped 50 more points. I'm frustrated with myself for abandoning the fundamentals that have served me well in the past. What do I do with 300k cash? I'm pretty frugal and have about 3k per month in passive income and hope to pull the ER trigger in the next 2-3 years. I'd like to keep an aggressive portfolio as I shouldn't need to touch it for 20 years or more, but who knows.......any advice is appreciated
If you will ER in 3 years, what are your plans for living expenses at that time. You don't mention many details, but let's say you intend to keep a year or two expenses in Bucket #1. If you need 50K per year, then Bucket #1 would have 100K. So it is already filled. But I would try to find some yield on that for a few years until you ER.

Now you have 200K that is not invested properly. What will be in your Bucket #2? If you whittle down this problem and think of stages, it will be much easier to take some action.
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Old 07-27-2014, 02:27 PM   #11
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As others post, don't feel you have to do it all at once, just figureout a desired allocation %s and timeframe to get there. I typically do 25%-50% at once, then more reallocations on a monthly or quarterly basis.
I'm doing a version of the same thing to increase my international stock allocation by 7-10%, so I'm moving one chunk and then will do the rest of the next 12-18 months.
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