Investing as quickly as possible usually beats dollar cost averaging. How to invest a lump sum of money | Vanguard
Just be careful of the lies we all tell each other and nobody asks about. Example; look at an Ibbotson chart, Anybody ever notice that the left axis is 1929, And the average rate of return of stocks over the pass X number of years always goes from the low point of 1929? There’s something to be said about holding a percentage in cash, that’s just there to buy when there’s blood in the streets..
I don’t know why anyone would dump a ton of money into this market all at once when it’s at its all time high.
It seems to me so many people want to get into the stock market when it’s high and they want to get out when it’s low.
The market being high gives me a good excuse to put some money into my house the first part of the year. Have some projects that need done and I know for sure that's not going to get any cheaper....the market might.
I did sell off some holdings late last year. Got my statement Thu and the amount I started 2019 at was lower than the amount I ended at in 2019....even after that sell off! Nice!
For better or for worse I am comfortable right now with a 20/80 mix in my portfolio, which I have been in since the dow was first touching 28000. I was up more than expected yesterday, even though the stock market sold off a bit. My portfolio benefits from drops in interest rates on the short to medium end of the yield curve. On days stock are up and interest rates fall, I do really will. I am sleeping well now during this late cycle rally toward dow 30,000. We'll see how it goes, but I would rather be a little early than late in taking some profits, especially aiming for potential retirement in 6 years. If interest rates touch 1% like some are predicting, I may move to 100% stable value through the next stock downturn, which would take my longer term bond investment profits off the table. If the market corrects 30-50% over the next year or so, I will move back to 60/40. My fall-back plan, God willing, is to keep putting some of our money into our home and cabin, and to work as long as needed because I do enjoy my job...maybe just work less. The interesting thing to me, yet not surprising, is that despite massive Federal Reserve injections of liquidity, the risk of deflation and negative interest rates still loom large. The only inflation I see is in risk assets, housing, higher education, food and healthcare. Due to ample oil supplies, demographics, automation/technology, world-wide glut of low skilled labor, and increasing wealth disparity, the deflationary pressures on mature economies are massive, thus downward pressures on interest rates, or the whole house of cards tumbles.
Looked at my monthly report a few minutes ago and for the year of 2019, my investments earned almost 17% exactly! I can not stress enough the importance of setting money aside. I was one that fell into that trap of "I use everything I earn". Little by little, I started to put aside...usually through employer offered 401 plans where they contributed a token match. Something is better than nothing kind of approach. Co-workers were socking away to get the maximum employers match....(I bet they are in great shape right now) But, I think the important part is getting a reputable advisor. I moved all my holdings to one a bit later in life than I should have, but it is evident now what the last two and a half decades produced.
Lets not forget the time investment in building our FW stacks. Mine are up at least 25% in terms of the amount hoarded over 2018. It was a big year in terms of getting ahead for me. I look at my stacks as money in the bank, particularly in the case of our cabin because I would have to buy LP to heat it if not for heating solely with wood. I also look at wood as a self-reliance investment and hedge against things we can't control. To me being prepared and properly hedged against the vicissitudes in life brings the most important payoff from any investment....peace of mind.
lukem not saying don’t invest! Not at all, just realize stock market started in 1792.. and traded over a million shares 1886?? So your 100 year time horizon is skewed because it makes the charts look better. Depression took over 20 years to recover losses. DOW, the 30 stocks, whenever one company is hurting average they remove it to keep #’s up. None of original 30 remain, GE was last. More data is good!!
Backwoods Savage (quoted from your Thought of the Day thread) "It just might happen yet; Money hidden under a mattress could pay higher interest than bank interest." If we do get negative interest rates in the USA, like many other mature economies, the impetus to do away with cash may gain momentum. That being said, I hope neither happens. Switzerland, Denmark, Sweden, Germany and Japan have all had negative interest rates already. It could happen here. Your money in the bank under such as regime would be debited. From Kenneth Rogoff who has been advocating for the elimination of all bills over $20: "Another advantage of eliminating large bills would be the effect on monetary policy. The Federal Reserve should be able to implement negative nominal interest rates vastly more effectively in the absence of large bills, which could prove quite important as a stimulative tool in the next financial crisis." https://scholar.harvard.edu/files/rogoff/files/should_we_move.pdf
