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Strategy to invest lump sum of cash into taxable account
Posted on 2/12/20 at 1:22 pm
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?
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 on 2/12/20 at 1:40 pm to tigersnipen
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 on 2/12/20 at 2:14 pm to tigersnipen
quote:1. Determine ideal investments and allocations.
Can anyone share what their strategy would be for investing a lump sum of cash into a taxable account?
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 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.
DCA over a few weeks/months?
quote: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.
Should I invest half now and keep the other half in cash for if/when there is a market pullback?
This post was edited on 2/12/20 at 2:21 pm
Posted on 2/12/20 at 2:21 pm to tigersnipen
do the lump sum...time in the market beats timing the market
Posted on 2/12/20 at 2:53 pm to tigersnipen
Posted on 2/12/20 at 3:09 pm to tigersnipen
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.
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