Just opened up a Roth through Vanguard for my wife and myself, both 24. Fully funded the $5,500 for each of us.

I saw in another thread that VTSMX was recommended. I'm between that or the 2055 retirement date fund (which I realize is about 63% VTSMX).

My question is would you just invest it all at one time or invest a portion of it over the rest of the year. Is $5,500 even enough to worry about DCA?

I appreciate any insight.

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Posted by Dusty Bottoms

Guadalajara

Member since Nov 2006

931 posts

Posted on 9/5/14 at 10:37 am to SLafourche07

You are dollar cost averaging at once per year now. I guess the question is frequency. The driving concept of DCA is that more often is better. I personally $458.33 once per month. My Roth is also Vanguard and is comprised of Total Stock, Total Bond, and Total Int'l Stock. As I get older, I will slowly gravitate toward Bond. Target date funds are fine, assuming you agree with their approach and weightings over time.

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Posted by SLafourche07

Member since Feb 2008

9928 posts

Posted on 9/5/14 at 11:02 am to Dusty Bottoms

Thanks for the response.

quote:
You are dollar cost averaging at once per year now.

I realize this. In future years, I will be contributing in monthly installments. I was just looking for opinions on if I should put the full amount in now, or let some sit in cash while I slowly start investing this years contributions.

I don't want to get into timing the market, but at the same time I realize the market is at an all time high.

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Posted by Teddy Ruxpin

Member since Oct 2006

39553 posts

Posted on 9/5/14 at 12:13 pm to SLafourche07

quote:
I don't want to get into timing the market, but at the same time I realize the market is at an all time high.

If you are really going to DCA the first thing you need to do is basically ignore the market.

Of course, I wouldn't blindly DCA if say Tuesday there's a major attack and you think you should wait for the next day tank or something.

But if you start putting off buying for weeks or months at a time then you aren't DCAing any more.

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Posted by SLafourche07

Member since Feb 2008

9928 posts

Posted on 9/5/14 at 1:32 pm to Teddy Ruxpin

I wasn't suggesting not investing because the market was high. Just that SINCE the market is at an all time high should I take the money and invest it over say 5 months.

If the market was in a downturn I wouldn't be as worried about it because historically it will rebound.

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Posted by jso0003

Member since Jun 2009

5170 posts

Posted on 9/5/14 at 2:01 pm to SLafourche07

Don't overthink it....

Flip a coin: Heads you DCA once a year tails you do it monthly.

On your time horizon, it's not really worth sweating over right now.

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Posted by Cold Cous Cous

Bucktown, La.

Member since Oct 2003

15043 posts

Posted on 9/5/14 at 3:53 pm to jso0003