Investing extra money and possible recession 2024

[Moneybags]

I have a traditional 401K that I have been putting the maximum every year. I also have been saving money in a taxable account for early retirement in year 2035. Since the summer of 2022 I have been investing extra money that I have from selling a property.

My goal is to invest $3K a month from work income plus additional $5K a month from the property that I sold. Since 6/2022 I have been putting total $8K a month in taxable account, but have about $60K of the $185K left to invest from the property.

Now since the stock market has been back to previous highs and now making all time highs. I am not concerned about the all time highs as this will always happen.
I am getting concerned that the market grew rapidly since 10/2023 with little to no pullbacks. I am getting concerned that this might be a possible bubble especially when the federal funds rate is still above 5% which might cause a possible recession in 2024.

I have been thinking about putting less money in the market from $8K to $4K a month but not sure if this is a good decision. I currently have $60k of the uninvested property money in a high yield savings or T-bills. I am concerned about putting a large amount of money every month when there might be a possible recession and we could be in a bubble with the market dropping. I would hate to see a large amount of my money go down and take years to breakeven. I also do not want to miss an opportunity to put the extra property money in the market when it is possibility lower. If the market continues to grow over next 6 months and unemployment is still low and fed starts to lower rates, and economy still doing good then I can put extra money in the market so I would have lost about 6 months' worth of growth. Once the rest of the $60K is invested then my planned investing rate is $4k a month.

Any recommendations or suggestions would be greatly appreciated.
Should I keep investing the full $8K a month or pull back for a little while and only invest $4K a month.


Thank you very much for your time in advanced, it is greatly appreciated.

 

[Sunset]

It's anyone's guess.

Earning 5% in short term treasuries right now doesn't seem too bad a hedge.

You didn't ask, but you may want to consider how much you put in IRA or 401K vs a Roth , as there are many folks here that filled up the IRA and now realize they will get taxed more than working once retired and SS + RMD's start.

 

[Kork13]

I don't mean to come across as condescending, but if the intention was always to invest all of the proceeds from your property, it would have been better just drop the entire $185k in at once. As the phrase approximately goes, "It's not about timing the market ... it's time IN the market that matters." Frankly, the question you're asking is just that -- "help me time the market." In general terms, it's always best to invest money intended for investment as soon as it becomes available to you.

That said, I do agree with Sunset, and if you're uncomfortable with the idea of investing the remaining $60k right now (my actual recommendation), some ST treasuries could be a good option to delay investing it immediately. You're welcome to continue DCA the money however you like, but I expect that over the long term, no matter how the markets perform, you'll find yourself disappointed by that plan.

 

[mathjak107]

there are loads of somewhat defensive portfolios out there .

but depending on what the underlying economic situation is even those portfolios can vary .

it’s like the all season portfolio and the permanent portfolio have been the historical winners in the ulcer index .

but rising rates recently bumped them out of that slot .

top is the best ulcer rated portfolios , the bottom how 2022 turned out

https://portfoliocharts.com/portfolios/

 

[VanWinkle]

Your thread title could end with any of the next 20 years listed at the end. There is no way to know, other than it will come at some point. Time in the market is what counts. If you need the cash for other things, use it there. If not, I would keep investing in the market in the allocation chosen. My SO is investing 10,000 per month for 34 months to get money that was in an annuity into the stock market. It is on auto invest and will only change if a bear market makes a one time investment a better fit.

 

[CSdot]

How much exposure do you have in the market? Big or small portfolio/many years of saving or just a few? Said another way, are you just starting to accumulate, or do you already have a few decades of growth to shepherd to your 2035 retirement?

Since the 90s I have kept a written quarterly track of my balance. When I look back on the 2000 dot com bust and the 2008 crash I see substantial percentage-wise swings, but since my portfolio balance was much smaller, the dollar drop was a mere blip. My portfolio is much larger today thanks to the power of compound interest, so the portfolio value swings from the 6 week 2020 pandemic drop and the subsequent 2022 correction were far more jarring. I suspect the late 24/25 recession will be equally shocking.

Point being, don't sweat the short term if you have a long way to go. YMMV, but my experience over 3 decades is the market works it self out in the long term.

 

[DrRoy]

I do tend to suggest that when in doubt, do half. You are already considering that.