What % of your portfolio do you leave in cash?

Most of the data supports dollar cost averaging. Sure there are situations (initial COVID time) where the market crashes, but those are few and far between. Also, at that point, what makes you think you are going to buy? You’ll likely still be waiting on the bottom as it makes its run up.

I personally don’t see any advantage of keeping money in your investment account purely on waiting on opportunity.

Right now, i'm like 50%, maybe 60%. I'm 20 years from retirement so i'm not super worried about it, i think a big drop is coming so i'll try to slowly open more positions on the way down. At SPY 3k i'll probably got 100% in. At 2700 i would double that on margin.

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Most of the data supports dollar cost averaging.

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I would still be dollar cost averaging as i take an amount every month and invest it. It’s just should I have 100% in the market at all times or have like 5-10% in cash to throw in when the market has taken a hit.

Basically thinking about a system where I’m 2% cash when I feel the market is down and 5-10% when I think the market is up. But wanted other thoughts on it as I do know the general idea is just DCA.

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Sure there are situations (initial COVID time) where the market crashes, but those are few and far between. Also, at that point, what makes you think you are going to buy? You’ll likely still be waiting on the bottom as it makes its run up.

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What makes me think that is I was sitting there during the down periods wishing I had cash in the side to throw in. Now obviously that’s a little biased saying that now but I don’t think I’m a guy that worries about finding the compete bottom. If I throw money in the market and it keeps going down, sure I beat myself up a little bit but I keep it in at that point knowing it will come back up.

Basically comes from regret back in Fall of 2021, when you know the market is up and don’t sell anything and keep DCAing because that’s the hard rule.

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I personally don’t see any advantage of keeping money in your investment account purely on waiting on opportunity.

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Appreciate the input

Still considering staying 100% invested but toying with my idea.

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I invest a certain amount every month but I’ve always debated myself on how much cash to leave uninvested until a big opportunity comes and let’s me buy cheap.

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Here is a little different spin on your question:



This chart shows rolling 1, 3, and 5 year S&P 500 returns from 1950-2020 if you invested on one of the 1,130 all time high days vs any one of the other random days. Even if you “only” bought in on all time highs, your 5-yr average return was 10% vs 11.1% for the other days. That’s not nothing, but it’s hardly worth worrying about, especially since you’re not going to only invest on all time high days.

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This chart shows rolling 1, 3, and 5 year S&P 500 returns from 1950-2020 if you invested on one of the 1,130 all time high days vs any one of the other random days. Even if you “only” bought in on all time highs, your 5-yr average return was 10% vs 11.1% for the other days. That’s not nothing, but it’s hardly worth worrying about, especially since you’re not going to only invest on all time high days.

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Definitely a fair thing to consider but don’t think it’s accurately showing you the potential returns.

Say you’re good at it (I’m not pretending to be but do like trying with smaller amounts), you wouldn’t be investing on just a random day. You’re likely not investing at the complete bottom either because no one is that good. But you would likely be in the bottom 20% of days for the period. Then you’re riding you’re way up to the top 20% of days and sell. Obviously way easier said than done but those are the true potential returns you would be looking at which would probably be a much bigger spread.

I know the old saying that the best days in the stock market are immediately after the worst days which makes it much harder. And honestly it’s why I’m still in theory mode.

I’m probably honestly underestimating how hard it is to actually do. Might track how I’d do without putting money at risk before I actually start doing it.

Right now? About 25% of my portfolio is in I-Bonds and 3-6 month Treasuries.

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Have 10% to 12% cash waiting to use if something big hits

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Depending on your portfolio, that could be six figures in cash, which is maybe a pretty steep amount to keep in cash, especially if the SHTHF stuff happened and cash were suddenly worthless. May want to shift to investing in some on-hand gold, medical supplies, water, antibiotics and ammunition, which, by itself is an alternative form of currency between adults, driven by bad times.

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Are you one of the it's all going to burn down then i'll swoop in and make a fortune guys that this board seems to have ?

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Are you one of the it's all going to burn down then i'll swoop in and make a fortune guys that this board seems to have ?

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Sorry. Mistype there.

I meant 100% invested 0% cash.