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Strategy to invest lump sum of cash into taxable account

Posted on 2/12/20 at 1:22 pm
Posted by tigersnipen
Member since Dec 2006
2085 posts
Posted on 2/12/20 at 1:22 pm
Can anyone share what their strategy would be for investing a lump sum of cash into a taxable account? Should I just go all in at once or DCA over a few weeks/months?

Not planning on needing this money for a while.

Should I invest half now and keep the other half in cash for if/when there is a market pullback?
Posted by jimbeam
University of LSU
Member since Oct 2011
75703 posts
Posted on 2/12/20 at 1:40 pm to
The market tends to go up. No one can do anything but guess when it may go down. Thus, a longer time in the market will typically produce higher returns.
Posted by buckeye_vol
Member since Jul 2014
35236 posts
Posted on 2/12/20 at 2:14 pm to
quote:

Can anyone share what their strategy would be for investing a lump sum of cash into a taxable account?
1. Determine ideal investments and allocations.

2. Invest lump-sum as soon as possible.

3. Keep the lump sum invested until needed, but consider rebalancing, harvesting losses, and/or reallocating accordingly.

4. Don’t panic and withdraw when the market goes down.
quote:

DCA over a few weeks/months?
DCA typically results in lower gains than lump-sum investing, and the lower the volatility, the less beneficial DCA becomes. And volatility has been quite low.
quote:

Should I invest half now and keep the other half in cash for if/when there is a market pullback?
You can do that if that’s your risk tolerance, but know that you’re likely to lose out on gains, and potentially considerable gains, for that portion in cash and those missed gains with grow as more is put toward cash.
This post was edited on 2/12/20 at 2:21 pm
Posted by iAmBatman
The Batcave
Member since Mar 2011
12382 posts
Posted on 2/12/20 at 2:21 pm to
do the lump sum...time in the market beats timing the market
Posted by lsu13lsu
Member since Jan 2008
11471 posts
Posted on 2/12/20 at 2:53 pm to
Posted by SalE
At the beach
Member since Jan 2020
2394 posts
Posted on 2/12/20 at 3:09 pm to
Well. since I am older, there is a different frame of reference for me. Personally..take the total amount and divide by the number of months until the next election...take that amount invest on a monthly basis. Now, if it appears that Trump is going in, put in the remaining.
Posted by tigersnipen
Member since Dec 2006
2085 posts
Posted on 2/12/20 at 3:13 pm to
Thanks everyone
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