Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Investing in this market
Old 06-16-2022, 06:33 AM   #1
Dryer sheet wannabe
 
Join Date: Jul 2011
Posts: 20
Investing in this market

I am wondering what people are doing right now if they have spare cash to invest. If I was 10 years younger I'd maybe be less hesitant -I'm 47 and would like to retire at 60. Due to some aggressive savings over the last few years and an inheritance I have about $275 k to invest. Ideally, I'd average that out and take advantage of dollar-cost averaging over a longer period but given my time horizon I'm not sure how to strategize (also complicating this is inflation and the current market). Additionally, I am likely going to sell an investment property in the next while which will put another sizable bit of cash in hand (not sure how much we'll get but my guess is about 150k after all expenses/ taxes).

We are in okay shape as we head for retirement. We have no mortgage, we have a few rental properties which will be paid off in the next few years (income generating with expenses more than paid for by tenants so no need to pay those down), maxed out RRSPs, TSFAs (with some room - which creates a tax-free investment for some of the cash mentioned above). I can get a moderate pension at 60 from work. What I'm hoping to do with this additional money is to create additional wealth for a more comfortable retirement. Likely we could wait to draw down on most of this until 65 if we needed to.

In any case, I know that no one can time the market or know what is going to happen but curious about how others are investing in these times and what others might do if you had cash sitting idle ready to invest.
RocketGirl is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-16-2022, 07:23 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
Thirteen years is a lot of time and you are still working.

As negative as I am on the economy and trends, if I were in your shoes (and I'm not), I would slowly DCA into the market but make sure I had at least a year's living expenses in cash. $4k/month gives you over five years to systematically invest (and adjust if needed). If you are lucky, the market will continue to drop for awhile.
copyright1997reloaded is offline   Reply With Quote
Old 06-16-2022, 07:29 AM   #3
Thinks s/he gets paid by the post
corn18's Avatar
 
Join Date: Aug 2015
Posts: 1,890
Invest when you have money, withdraw when you need money. It's just that simple.
__________________
Consistently sets low goals and fails to achieve them.
corn18 is offline   Reply With Quote
Old 06-16-2022, 07:51 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,686
$275K / 24 months = 11,458 monthly. I would do this.

When we inherited a similar amount, it was already invested. So we did not need to DCA on a schedule.
target2019 is offline   Reply With Quote
Old 06-16-2022, 07:59 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Yes, as earlier posters said, young people should continue to DCA into the market.

If you are a stock picker, be careful not to be tempted by the stocks that have fallen hard.

From the lessons in the past, just because something is down to 25c or 10c on the dollar does not mean that it will go back to the dollar. It was never worth a dollar in the 1st place.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 06-16-2022, 08:04 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Feb 2019
Location: St Pete
Posts: 1,235
I'd DCA in as other's have said.



Small potatoes compared to the cash you are sitting on but for reinvesting my HSA after I liquidated it before transferring to another custodian. I am DCAing over two years and any month that is down 1% from the prior month I invest 150% of the planned amount and if down 2% I invest 200%. I don't like being out of the market so it accelerates me getting in the market and I'm buying a bit more when there was a recent decline. I did not backtest it but it felt better than throwing in the lump sum late in a bull market. Fun and games!
__________________
FIREd 7/2021 at age 47
FLSUnFIRE is offline   Reply With Quote
Old 06-16-2022, 08:15 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
I remember that during the market bull run, whenever someone asked whether he/she should DCA or go all in, the majority of the responses said to "go all in, all at once". It's "time in the market", and the sooner one goes in, the more he/she has.

So far, there's not yet a comment along that line.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 06-16-2022, 08:26 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Feb 2019
Location: St Pete
Posts: 1,235
Quote:
Originally Posted by NW-Bound View Post
I remember that during the market bull run, whenever someone asked whether he/she should DCA or go all in, the majority of the responses said to "go all in, all at once". It's "time in the market", and the sooner one goes in, the more he/she has.

So far, there's not yet a comment along that line.

I agree statistically that is the best option but we are each a sample size of one and the probability of buying at a high that will result in less than optimal returns is not zero. It also ignores psychology of money and risk aversion of humans/response to loss.


Statistically I will be dead at age X which is good for actuaries managing risk pools but not particularly useful for me to use in making major life decisions.
__________________
FIREd 7/2021 at age 47
FLSUnFIRE is offline   Reply With Quote
Old 06-16-2022, 08:33 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Quote:
Originally Posted by FLSUnFIRE View Post
I agree statistically that is the best option but we are each a sample size of one and the probability of buying at a high that will result in less than optimal returns is not zero. It also ignores psychology of money and risk aversion of humans/response to loss.

Statistically I will be dead at age X which is good for actuaries managing risk pools but not particularly useful for me to use in making major life decisions.
Exactly.

An investor must understand himself and his risk tolerance. Don't be swayed by the crowd chanting "buy, buy, buy", then "sell, sell, sell".

That's what I find investing an interesting challenge. You are fighting your own greed, then fear. You have to be able to ignore the siren lure of "getting rich" meme stocks.

And that's why buy-and-holders and indexers tend to do better than active investors, or should I say "most active investors". I ask myself, if the typical active investors do so poorly, can you do the reverse and be ahead?
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 06-16-2022, 08:33 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
I'm buying short term corporate notes. I did the same in March 2020 and made a lot of money. Many of the notes that I bought then have matured and the cash was sitting in a money market savings account. I just initiated another large transfer of cash to my brokerage account. You have to take the emotion out of investing and buy when fund managers are in a forced selling mode. I'm putting in low ball limit orders on short term notes maturing in 2023 and 2024 at bids prices yielding 8% waiting for funds to sell as they are forced to. If they fill great, if they don't tomorrow is another day. This time the Fed is helping this type of trade.
Freedom56 is offline   Reply With Quote
Old 06-16-2022, 08:39 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
OK, I'll say it, I'd put it in the market now. You're getting a 20% discount from where it was.

Psychologically I'd have more regret tricking it in and missing out on a recovery (if it happens) than seeing it drop more after investing, mostly because on average, being in the market comes out better than market timing or DCAing.

If you don't feel that way, then DCA in. It's your money.
RunningBum is offline   Reply With Quote
Old 06-16-2022, 08:48 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
Quote:
Originally Posted by target2019 View Post
$275K / 24 months = 11,458 monthly. I would do this.

When we inherited a similar amount, it was already invested. So we did not need to DCA on a schedule.
See, that's my problem with the DCA choice. Why treat money differently when you inherit invested money vs. cash? If DCA was the right choice, shouldn't you sell the inherited investments and start over with the DCA?

But people don't. It's an emotional decision. They fear an active decision backfiring, but not a passive decision. I don't think financial decisions should be made emotionally. But again, that's me, others can do what they want. I wasn't even going to make this point but this captured my view on the lump sum vs. DCA decision perfectly.
RunningBum is offline   Reply With Quote
Old 06-16-2022, 08:49 AM   #13
Recycles dryer sheets
 
Join Date: Aug 2020
Posts: 219
Quote:
Originally Posted by FLSUnFIRE View Post
I'd DCA in as other's have said.



Small potatoes compared to the cash you are sitting on but for reinvesting my HSA after I liquidated it before transferring to another custodian. I am DCAing over two years and any month that is down 1% from the prior month I invest 150% of the planned amount and if down 2% I invest 200%. I don't like being out of the market so it accelerates me getting in the market and I'm buying a bit more when there was a recent decline. I did not backtest it but it felt better than throwing in the lump sum late in a bull market. Fun and games!
That's a good solid DCA strategy. Curious on a day like today down 3% or more are you tempted? Or are you able to stick to it, I am not strong and often can't help but buy a little on a dip like today to feel good regardless of my overall DCA strategy.
npage is offline   Reply With Quote
Old 06-16-2022, 08:50 AM   #14
Thinks s/he gets paid by the post
corn18's Avatar
 
Join Date: Aug 2015
Posts: 1,890
Yup, everyone lump sums into the market every day. Would you sell all of your current investments and then DCA back in (assuming no tax)? Nope. Like I said earlier, invest when you have money and withdraw when you need money.
__________________
Consistently sets low goals and fails to achieve them.
corn18 is offline   Reply With Quote
Old 06-16-2022, 08:54 AM   #15
Thinks s/he gets paid by the post
latexman's Avatar
 
Join Date: Mar 2014
Location: Apex and Bradenton
Posts: 1,792
I noticed my overall AA was 5% off it's 60/40 target this morning. Between my IRA and 401k, the 401k was off the most. So, to start setting things back to target, I sold some of my longest duration bond fund (VIPIX / -8% YTD) and bought more of a mid-cap stock fund (FSMAX / -27%) I have.
__________________
Good Luck,
Latexman
latexman is online now   Reply With Quote
Old 06-16-2022, 08:58 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2012
Location: Seattle
Posts: 6,008
Quote:
Originally Posted by corn18 View Post
Yup, everyone lump sums into the market every day. Would you sell all of your current investments and then DCA back in (assuming no tax)? Nope. Like I said earlier, invest when you have money and withdraw when you need money.
What if you invest in something and they use up all your money?
Fermion is offline   Reply With Quote
Old 06-16-2022, 09:00 AM   #17
Thinks s/he gets paid by the post
corn18's Avatar
 
Join Date: Aug 2015
Posts: 1,890
Quote:
Originally Posted by Fermion View Post
What if you invest in something and they use up all your money?
Are you asking what if an investment goes to $0?
__________________
Consistently sets low goals and fails to achieve them.
corn18 is offline   Reply With Quote
Old 06-16-2022, 09:13 AM   #18
Thinks s/he gets paid by the post
latexman's Avatar
 
Join Date: Mar 2014
Location: Apex and Bradenton
Posts: 1,792
Quote:
Originally Posted by Fermion View Post
What if you invest in something and they use up all your money?
That's a good reason why we diversify.
__________________
Good Luck,
Latexman
latexman is online now   Reply With Quote
Old 06-16-2022, 09:30 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
I wouldn't buy equities until the casino mentality is crushed. When meme stocks GameStop (GME), currently at $122 drops below $10 and investors buy companies that actually earn money, it will be okay to buy again. We have seen this movie before back in 2000 when earnings didn't matter until they did. We had cult financial experts like Henry Blodget who led his lemmings off a cliff. Today with have hucksters like Cathie Wood that have bulldozed their lemmings off a cliff.
Freedom56 is offline   Reply With Quote
Old 06-16-2022, 09:36 AM   #20
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 47,474
Quote:
Originally Posted by RocketGirl View Post
I am wondering what people are doing right now if they have spare cash to invest. [...]

[...] curious about how others are investing in these times and what others might do if you had cash sitting idle ready to invest.
I'm doing nothing, since that has worked for me in during past times of market volatility/declines.

If I had a need to invest, I'd DCA into the market according to my pre-determined asset allocation.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.

Happily retired since 2009, at age 61. Best years of my life by far!
W2R is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
investing for Income is becoming more important than investing for capital gains imoldernu Active Investing, Market Strategies & Alternative Assets 26 02-19-2019 12:44 PM
Equity dividend investing vs equity index investing galeno FIRE and Money 16 01-01-2015 03:51 AM
Income investing and total return investing. clifp FIRE and Money 18 09-03-2011 09:17 AM

» Quick Links

 
All times are GMT -6. The time now is 11:04 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.