OP here. Yes, for the past year or so I've been putting some (though likely not enough) excess cash into treasuries (and some CDs). Indeed, I purchased another tranche of treasuries this morning. I've been investing in fixed income largely to the exclusion of adding new money to stock positions in taxable accounts. (I have not stopped material investments via retirement and 529 accounts).

The impetus of this post is the recognition that at some point I likely need to start building back up taxable account stock investments for the long haul. While I have concerns--expressed well by the poster above--about 2023 being a potentially bumpy ride for equities, long term it likely makes sense to have a greater concentration in stocks. Thus I'm thinking about my plan to return to investing a set amount each week to slowly add to my taxable equity portfolio, recognizing that I won't know when the market hits the bottom, but I can DCA on the way down (assuming there is a down) and then be in for longterm. The reason I'm posting here is essentially to get feedback on this thinking.

Anonymous wrote:Many people don't realize this, but since 1929, T-bills have outperformed stocks more than 50% of the time. Of course, over the long run, stocks massively outperform because of the large gains during bull runs like 2009-2021. But there are long stretches where it doesn't make sense to buy stocks and IMO, we are in one such stretch.

Yup.

Treasuries OP. They're yielding 5%.

The S and P 500 looks incredibly weak. It is trading right now at over 18+ times earnings. In the last 30 years, the market has only been able to sustain that level of valuation only twice - pre-dot com blow up and during the pandemic when the Fed was pumping the market. The rally from early in the year was just liquidity coming from abroad, but it is now drying up.

The market is going to fall because earnings and outlooks for companies have gotten worse while valuation is high. At a minimum, the market needs to trade closer to its historic average while the effect of rate hikes and lower earnings still need to work its way through. TBH, I don't think you're gonna miss out on a whole lot this entire year OP. You can park your money in a safer asset like treasuries to earn yield while avoiding volatility. Come back later when there is more convincing evidence inflation is abating and not being sticky and the fed has more clarity on what to do.

OP back. Thanks all. I'm likely just acting out of a bit of fear because of recession concerns. I'm going to turn weekly investing back on, and let it run for a while. Given our lengthy horizon, I just need to build more market positions and maintain far less in cash. I've also built up a fixed income position, that I'll either reinvest in fixed income upon maturity if rates remain high or will move to the market later.

To the nice poster above re ensuring enough cash for emergency fund--yes absolutely, and I appreciate the point. We have three kids, and well know the costs involved there! We are fortunate to have material excess cash, and I need to take a more proactive investment strategy rather than just letting cash accumulate, even if it is mostly in high yield savings accounts. So back to S&P 500 we go.

Anonymous wrote:Many people don't realize this, but since 1929, T-bills have outperformed stocks more than 50% of the time. Of course, over the long run, stocks massively outperform because of the large gains during bull runs like 2009-2021. But there are long stretches where it doesn't make sense to buy stocks and IMO, we are in one such stretch.

Agreed with you up until this point--the reality is no one can know. Innovations and changes come unexpectedly. OP is in their 30s and has a long investment horizon, T-bills would not be a wise investment choice for them.

IMO it depends whether/when you will need it. If your plan is to live off of dividends after retirement and pass principal untouched to heirs then it make the most sense to invest in stocks and grant heirs the step up in basis and train them to behave similarly this extending the time horizon on those investments.

Financial analysis suggests that you should just put whatever you are going to put in the market in the market when you have it because over the long haul the market goes up--so time in the market outweighs timing the market.

But it sounds like you might struggle psychologically with that. Dividing it up and putting it into an automatic enroll cycle might work better for you--it may also make it more likely you will continue on the auto-invest cycle indefinitely. Don't forget to keep an emergency fund though and to evaluate if you have enough cash to weather the ups and downs of the market. Buying a house changes your emergency fund needs as you have to anticipate potential home maintenance costs coming down the pike, as does having kids.

Many people don't realize this, but since 1929, T-bills have outperformed stocks more than 50% of the time. Of course, over the long run, stocks massively outperform because of the large gains during bull runs like 2009-2021. But there are long stretches where it doesn't make sense to buy stocks and IMO, we are in one such stretch.

OP, I think your impulse is exactly right. Just start dollar-cost averaging into the market and stay in for the long haul. Trying to guess what will happen in the short term is really a fool’s errand, especially in this period of uncertainty.

Anonymous wrote:No, "timing the market" means trying to time your purchases so that you buy when prices are low and sell when prices are hi. its impossible because nobody knows what the market will do.

PP is talking about "time in the market." That is buying when young and holding.

09:36. Yes, PP. That's what I'm getting at. Timing the market with the usual definition is educated gambling. So time in the market is the real timing of the market.

You need another coffee.

No, "timing the market" means trying to time your purchases so that you buy when prices are low and sell when prices are hi. its impossible because nobody knows what the market will do.

PP is talking about "time in the market." That is buying when young and holding.

"Timing the market" means buy when you're young, hold for ever, and enjoy the proceeds to pay for college tuition or retirement.

It's the only way it actually works, if you're talking about a modest initial investment and making millions off of it.

Anonymous wrote:Oops. OP here. Hit post before done. So the question: I should just start buying each week to dollar cost average, right? Even if the market tanks, I'll then be getting at least some money in at the bottom and riding it back up? Am I off here? Any reason not to return to my slow-but-study weekly investing approach?

Lump sum has better returns over time if you have the stomach for it which you should at your age.

Oops. OP here. Hit post before done. So the question: I should just start buying each week to dollar cost average, right? Even if the market tanks, I'll then be getting at least some money in at the bottom and riding it back up? Am I off here? Any reason not to return to my slow-but-study weekly investing approach?

Some years ago, I was making automatic S&P500 investments each week. I stopped about three years when we built a house, to save up cash for that. Now, I'm back to having excess cash to invest, and have been putting it into fixed income. For some nagging reason, I am quite nervous to invest *now* in the market, but know that I'll be back in eventually. (For context, I'm late 30s, so nowhere near retirement.) For better or worse, I've generally subscribed to the theory that (a) you can't really time the market and (b) low-cost S&P500 is the way to invest.