Want to increase % of stock allocation...timing?

[TGL405]

Seeking any advise on market timing to increase my allocation of stocks (index funds).
I'm a conservative investor -currently abt 85% stable value & bonds and 15% stocks (VHDYX and extended market fund) but want to increase the allotment of stocks. I don't need this for monthly expenses as I'm still working, but would like to see some more growth. I get nervous above a 30/70 allocation, but would be comfortable between 15-30% stock allocation.
I have 35-40k that I'm comfortable moving, so should I wait for a down day in the market to make the change, move a % at a time, just do it all at once, or just continue to sit on the sidelines for a while?

Any thoughts?

 

[LOL!]

Ah, the ol' "Buy now or wait?" question. No one can predict the future.

So do both: Buy some now and invest more every month until you got what you want. You can also buy more if things drop.

Also what to buy is tricky. Do you buy something going up like a small-cap value fund or your mid/small cap fund? Or do you buy something that has dropped like an international fund or an emerging markets fund?

Oh, did I tell you that no one can predict the future?

 

[MichaelB]

This is a discussion on timing so I moved the thread

 

[TGL405]

[I]"So do both: Buy some now and invest more every month until you got what you want. You can also buy more if things drop.

Also what to buy is tricky. Do you buy something going up like a small-cap value fund or your mid/small cap fund? Or do you buy something that has dropped like an international fund or an emerging markets fund"? [/I]


I was thinking 50/50 S&P and either total mkt or small caps...

 

[ERD50]

Yes, go all in, up to your max AA on March 09, 2009.

Ooops, you missed it! See post from LOL!.

There has been a lot of reasoned analysis in this forum that the market is overvalued and primed for a fall, or at least an extended flat period. I don't disagree with that assessment, but the market has not been listening... so far.

15-30% is a very low equity exposure. I fear that if you put more in, you might be tempted to sell on any drop? Whatever method you choose, make sure you are prepared for the volatility.

-ERD50

 

[LOL!]

I was thinking 50/50 S&P and either total mkt or small caps...

So, you like the buy-high momentum play? You've got some guts.

Full disclosure: Those are the things on my list to sell soon.

 

[TGL405]

I did miss it in 2009, because 2008 still hurts too much!
I think I'm still in protection mode, but I'm at least peeking out from under the rock (it's taken awhile).
Unless I hear or see additional good advice, maybe I'll just change future deposits to 30/70 and wait for a pullback to put in a larger chunk at a time.

 

[eta2020]

Just stay where you are comfortable

I was all my life 100% equities 2008 crisis, Russians in Crimea, Twin Towers, you name it I don't care.

 

[LOL!]

Here is something about uncertainty and control that you might find helpful:
http://www.nytimes.com/2016/11/15/y...ncertain-times-what-do-you-still-control.html

 

[RetireAge50]

Just put it all in and call it a day. The reason you put money in stocks is for it to double every 7 years or so. Who cares when it falls 25% or whatever.

 

[eta2020]

There has been a lot of reasoned analysis in this forum that the market is overvalued and primed for a fall, or at least an extended flat period. I don't disagree with that assessment, but the market has not been listening... so far.
-ERD50

Friend of mine is telling me that since 2009

 

[TGL405]

Just stay where you are comfortable

I was all my life 100% equities 2008 crisis, Russians in Crimea, Twin Towers, you name it I don't care.

I really wish I could do that, and I'm trying. Many people feel a sense of renewed hope- or some kind of change is upon the country...we'll see how that plays out, but it does give me confidence to put some more money to work.

 

[ERD50]

Friend of mine is telling me that since 2009

Let us know when he finally decides to buy, we can sell with confidence then!

-ERD50

 

[eta2020]

I really wish I could do that, and I'm trying. Many people feel a sense of renewed hope- or some kind of change is upon the country...we'll see how that plays out, but it does give me confidence to put some more money to work.

There is ALWAYS something to worry about. I know what you are referring to.

To me it is worry, not a renewed confidence. But market will do quite fine on a long run.

 

[pb4uski]

You could value average it in over a period of time. Let's say you chose to invest $40k over 10 months. Invest $4k. A month later add whatever you need to to bring the value up to $8k. A month later add whatever you need to to bring the value up to $12k. Repeat until the entire amount is invested.

You'll invest more when the market is relatively low and less when it is relatively high.

 

[TGL405]

I think it just cycles about every eight years or so, but I'm just trying to keep positive. Positivity is contagious. Maybe that's what is happening in the markets right now?

 

[TGL405]

You could value average it in over a period of time. Let's say you chose to invest $40k over 10 months. Invest $4k. A month later add whatever you need to to bring the value up to $8k. A month later add whatever you need to to bring the value up to $12k. Repeat until the entire amount is invested.

You'll invest more when the market is relatively low and less when it is relatively high.

I like the idea, but I don't understand the last sentence..Does that mean the market is lower more than it's higher- or that the market just continues to go up over time?

 

[Dash man]

You may want to dump some of your bonds and then put a little in equities over the next few months. Good time to reduce your bond exposure.

 

[pb4uski]

I like the idea, but I don't understand the last sentence..Does that mean the market is lower more than it's higher- or that the market just continues to go up over time?

Neither. Let's say your $4,000 declines to $3,500 the first month... then you invest $4,500 (to raise your $3,500 to $8,000). OTOH, if your $4,000 increases to $4,500 then you would only invest $3,500 (which would increase your $4,500 balance to $8,000).

So you invest more with the market is relatively low and less when the market is relatively high.

 

[Sunset]

I did miss it in 2009, because 2008 still hurts too much!
I think I'm still in protection mode, but I'm at least peeking out from under the rock (it's taken awhile).
Unless I hear or see additional good advice, maybe I'll just change future deposits to 30/70 and wait for a pullback to put in a larger chunk at a time.

When you say this, it tells me you are incredibly nervous about the market, and could easily (did) fall into the trap of:
Buy when high because everything looks good, feels good and happy (this is where you are right now).
Sell when low because the world is horrible, everyone is scared, it will all end (maybe you did this in 2008? ).

I think you are on the right idea, change your future deposits to more stock, and wait for a 10% pull back to stick in a big wad of money (maybe 1/4 of it). Then if pull back is still around or worse, put in more each month.

And whatever you put in stock (ex VTI), don't sell it for 10 years.

 

[Totoro]

I'd say forget about the big wad. You'll either lose sleep, regret decisions or never enter the market.

Figure out an amount to buy every month (more often = better) and stick to it for the next 10 years, regardless of market movements.

Never deviate from that buying program. Evaluate after 10 years only. Again, regardless of outcome.

You already lost seven years of gains. It could have been big losses too. You'll never know where it ends, not even as it happens.

It's really simple, but alas not easy. If your fear threshold is too low to stick to a mechanical increase program, don't do it. Instead, accept you'll never get the stock market gains, and sleep well at night.

 

[DrRoy]

I like the idea, but I don't understand the last sentence..Does that mean the market is lower more than it's higher- or that the market just continues to go up over time?

It means you get more shares when the price is lower. I agree with the average it in over time concept, but not 10% each over 10 months. Just make it 3 or 4 purchases over as many months. If there is a market drop in that time, you could move up one of the buys.

 

[NW-Bound]

Averaging into the market is advisable for people who are afraid of jumping in all at once.

For people who are still working and still accumulating, down markets should be regarded as a chance to buy.

It's only bad for retired people who are looking to sell, in order to convert stocks to bread (and airfare, and caviar, and champagne, etc...).

 

[eta2020]

http://finance.yahoo.com/news/equity-inflows-hit-2-highs-155913287.html

Seems lot of people have same idea

 

[COcheesehead]

http://finance.yahoo.com/news/equity-inflows-hit-2-highs-155913287.html

Seems lot of people have same idea

Retail investors don't have a great history of buying low and selling high.