How do I fix this mistake? | TigerDroppings.com

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Cold Pizza
Ohio State Fan
Member since Sep 2011
7639 posts

How do I fix this mistake?


I rolled the majority of my ROTH and regular IRA's from stocks to MMA last Spring, anticipating a drop in the market. We all know how that worked. At least being in an IRA I didn't pay capital gains.

I guess I need to roll back in.This is money I won't need for 30 years. My plan was to dollar cost average the whole works back into stock index funds over the next 4 months. Comments? Suggestions? Do you have a better idea?







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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120427 posts

re: How do I fix this mistake?


quote:

My plan was to dollar cost average the whole works back into stock index funds over the next 4 months. Comments? Suggestions?

Why not just dump all the money in now if you think it's a good time to buy?

Shouldn't be that tough to diversify with some ETFs and individual stocks in this market






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Chris Farley
Maryland Fan
Regulating
Member since Sep 2009
3662 posts

re: How do I fix this mistake?


1. Don't try to time the market with your retirement accounts.

2.
quote:

My plan was to dollar cost average the whole works back into stock index funds over the next 4 months


Probably your best option at this point.






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GimmieSomeGlitter
Ole Miss Fan
GreenBOW ALABAMA!
Member since Aug 2011
491 posts

re: How do I fix this mistake?


DCA is the best way. Just don't look at it everyday or you'll drive yourself crazy. Maybe rebalance semi annually or annually.





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Dead Mike
LSU Fan
Cell Block 4
Member since Mar 2010
1763 posts

re: How do I fix this mistake?


Don't DCA a lump sum.





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GimmieSomeGlitter
Ole Miss Fan
GreenBOW ALABAMA!
Member since Aug 2011
491 posts

re: How do I fix this mistake?


Please explain...





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fishfighter
LSU Fan
Baton Rouge
Member since Apr 2008
18325 posts

re: How do I fix this mistake?


quote:

anticipating a drop in the market.



quote:

This is money I won't need for 30 years.




First off, the market just about has never droped on an election year. So I don't know were you got that idea.

At your age and with 30 years, time is on your side towards investments. Never try to time the market.

Now that the market is high, I would wait out some but not all your moneys. They will be a correction coming soon by next April/May.






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jso0003
Auburn Fan
Birmingham/Atlanta
Member since Jun 2009
4795 posts

re: How do I fix this mistake?


quote:

At your age and with 30 years, time is on your side towards investments. Never try to time the market.


quote:

Now that the market is high, I would wait out some but not all your moneys. They will be a correction coming soon by next April/May.


Does not compute.






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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
12932 posts

re: How do I fix this mistake?


quote:

They will be a correction coming soon by next April/May.




You're sure about this? You know better than 99.999999999999999999% of investors?






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tirebiter
LSU Fan
ATL
Member since Oct 2006
5150 posts

re: How do I fix this mistake?


The historical numbers support lump summing the money back in. If it is not a large amount of money I wouldn't worry one way or the other. Poor psychological investing behavior destroys retail investors' performance over time, look at the difference between actual investment returns vs retail investor returns, retail investors will be significantly worse.

You need to determine an allocation that keeps you comfortable longer term, ie 60/40, 50/50, whatever, or you can follow something similar to the Ben Graham 25/75 guideline, ie reduce equity allocation when equity market valuations are high, but never completely exit in case you are wrong (25% floor), which would have kept you from doing what you did in 2012. It's more difficult in taxable, say you have multiple 6-figures in gains on paper, are you going to pull the trigger and pay taxes on that due to feeling overly cautious about the market direction? That's were the investment plan/allocation comes into play, and harvesting losses along the way helps immensely.






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Cold Pizza
Ohio State Fan
Member since Sep 2011
7639 posts

re: How do I fix this mistake?


I have never been for timing the market but had a bad feeling. Decided I would try it once and NEVER do it again if I was wrong. Well, I was.

I'm DCA'ing back into my Vanguard Total Stock and Total International Stock over the next 8 weeks.






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GimmieSomeGlitter
Ole Miss Fan
GreenBOW ALABAMA!
Member since Aug 2011
491 posts

re: How do I fix this mistake?


quote:

I'm DCA'ing back into my Vanguard Total Stock and Total International Stock over the next 8 weeks.








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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
12932 posts

re: How do I fix this mistake?


quote:

I have never been for timing the market but had a bad feeling. Decided I would try it once and NEVER do it again if I was wrong. Well, I was.

I'm DCA'ing back into my Vanguard Total Stock and Total International Stock over the next 8 weeks.


Smart decision. I have a friend/mentor who has a net worth of over $60 Million, he told me that "it's not timing the market, it's time in the market" that made him wealthy






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