Investing a windfall in the stock market now? Dollar cost averaging? Lump sum? Wait?

[Anonymous]

Anonymous wrote:

TwistdMike wrote:Google Dave Ramsey and listen to his advices regarding inheritances, taxes, rollovers.

He also has trusted advisors in your area listed on his web site, might be a good choice in this case.

Do not do this! His trusted advsiers charge very high fees. Stick with Total Stock market like you were thinking.

I think Vanguard has a study that shows 2/3 of the time a lump sum contribution will outperform dollar cost average. That won’t matter if you wind up being one of the poor souls who lump sums in and the market declines. It IS just psychological, but if dollar cost averaging will help you commit to getting the money invested, than that is what you should do.

+1 OP just pick a time period (6 months, a year, 18 months) and dollar-cost average the money in over that period. Nothing to it but to do it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I suspect DCUMers will recommend taking the dollar cost avg path. I'd, however, wait it out little bit. Market is sending all kinds of warning signals that it is about to turn sour (yes, I know you can't time the market)...

OP here: That's where I'm stuck! I know we should invest the money instead of having it sit in a money market account, but the market is at an all-time high and several indicators point to a downturn.

The market spends the vast, vast majority of its existence near all time highs.

Wow. I've been through 3 market downturns. Why am I pretty sure you don't remember the last one?

Tell us where the market was when you started investing and where it is now after 3 market downturns (and probably something like 5-10 unnamed but very real market upturns)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I suspect DCUMers will recommend taking the dollar cost avg path. I'd, however, wait it out little bit. Market is sending all kinds of warning signals that it is about to turn sour (yes, I know you can't time the market)...

OP here: That's where I'm stuck! I know we should invest the money instead of having it sit in a money market account, but the market is at an all-time high and several indicators point to a downturn.

The market spends the vast, vast majority of its existence near all time highs.

Wow. I've been through 3 market downturns. Why am I pretty sure you don't remember the last one?

I remember the last one. I was buying steadily when the Dow was around 12,000, and I held all my stocks and continued buying when it was around 6500.

Now it's over 26,000.

What's your point?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I suspect DCUMers will recommend taking the dollar cost avg path. I'd, however, wait it out little bit. Market is sending all kinds of warning signals that it is about to turn sour (yes, I know you can't time the market)...

OP here: That's where I'm stuck! I know we should invest the money instead of having it sit in a money market account, but the market is at an all-time high and several indicators point to a downturn.

The market spends the vast, vast majority of its existence near all time highs.

Wow. I've been through 3 market downturns. Why am I pretty sure you don't remember the last one?

Tell us where the market was when you started investing and where it is now after 3 market downturns (and probably something like 5-10 unnamed but very real market upturns)

NP: I started investing in the mid 1990s so there have been two significant downturns and assorted other drops. But I've just steadily added it in to mainly run of the mill index funds with a few individual stocks/specialty funds here and there at around 75/25 allocation for most of the time (in the 1990s it was 100% stocks as I was 20). I added more when we were DINKS, less in grad school and the daycare years, back to more again. I never "took money out" because of market timing. My annualized returns are 9.3%.

[Anonymous]

If your plan for this money is to take the minimum distributions and move them over to your own retirement accounts each year, then just invest them in the same asset allocation as your existing 401ks (if you are comfortable with them) today. If you aren't comfortable enough with your current investments to invest this new money the same way, then you are probably taking on too much risk already. In that case I'd suggest moving some money out of stocks and into bonds.

[Anonymous]

Wait for the next downturn and pounce.