|
06-24-2014, 01:10 PM
|
#1
|
Recycles dryer sheets
Join Date: Oct 2006
Posts: 134
|
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
Sent from my iPhone using Early Retirement Forum
__________________
I'm sorry if I ask questions that are too nosy/personal.
|
|
|
|
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!
|
06-24-2014, 01:14 PM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
|
Two words: Asset Allocation.
|
|
|
06-24-2014, 04:02 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
|
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.
|
|
|
06-24-2014, 04:13 PM
|
#5
|
Full time employment: Posting here.
Join Date: Nov 2008
Posts: 728
|
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
|
|
|
06-24-2014, 05:37 PM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Nov 2012
Location: Madeira Beach Fl
Posts: 1,403
|
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.
__________________
_______________________________________________
"A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do" --Bob Dylan.
|
|
|
06-25-2014, 12:16 AM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
|
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.
__________________
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
|
|
|
06-25-2014, 05:21 AM
|
#8
|
Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
|
Quote:
Originally Posted by pb4uski
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
|
|
|
06-25-2014, 07:40 AM
|
#9
|
Recycles dryer sheets
Join Date: May 2012
Posts: 90
|
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.
|
|
|
06-25-2014, 08:38 AM
|
#10
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,686
|
Quote:
Originally Posted by Scout
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.
|
|
|
07-27-2014, 01:27 PM
|
#11
|
Thinks s/he gets paid by the post
Join Date: Oct 2012
Location: Reno
Posts: 1,331
|
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.
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|