Anonymous wrote:

Anonymous wrote:There are just as many studies that show a lump sum investment outperforms dollar cost averaging as there are that show the inverse. Honestly, I would just wait for the market to have a down day and make a lump sum purchase. Then never look back.

Thanks. There is that. I just know that she will be upset if it drops. It was like pulling teeth to get her to actually get the account open and put money into it.

Well she better be prepared to be upset. Being married to her would be like nails in chalkboard.

Why do you care for 401k money? You pay ordinary tax on the withdrawal and basis doesn’t matter. If it’s Roth you really don’t care. Am I missing something?

Anonymous wrote:

Anonymous wrote:There are just as many studies that show a lump sum investment outperforms dollar cost averaging as there are that show the inverse. Honestly, I would just wait for the market to have a down day and make a lump sum purchase. Then never look back.

Thanks. There is that. I just know that she will be upset if it drops. It was like pulling teeth to get her to actually get the account open and put money into it.

If a down day makes her upset, stay out.

I'm in a similar situation, OP, in that I'm investing about $26K into mine over a six-month window from November through April because of some quirky timing of work and cash flow. (Different in that my plan doesn't allow dollar cost averaging within the plan, though, so for me it's just about when the contribution gets made.) I was initially trying to time that to the dips, but honestly it's hard to do. I gave up and decided to set it to automatically put ~$2500 twice a month so that my risk would be spread out. It's not perfect, but it's a lot less stressful and it doesn't pin everything on the timing of a one-time contribution. (Normally I try to do monthly contributions through the year, which also spreads out the risk of market volatility.)

If she's concerned about losing too much of it, she can also split it between a target retirement fund (which is going to bounce around a bit, especially if the market drops) and a more stable, but likely lower long-term yield, fund.

Anonymous wrote:

Anonymous wrote:There are just as many studies that show a lump sum investment outperforms dollar cost averaging as there are that show the inverse. Honestly, I would just wait for the market to have a down day and make a lump sum purchase. Then never look back.

Thanks. There is that. I just know that she will be upset if it drops. It was like pulling teeth to get her to actually get the account open and put money into it.

Upset? You can’t think like a trader. Think like an investor.

Anonymous wrote:This 18.5 is 2018 contribution?

Yes.

Anonymous wrote:There are just as many studies that show a lump sum investment outperforms dollar cost averaging as there are that show the inverse. Honestly, I would just wait for the market to have a down day and make a lump sum purchase. Then never look back.

Thanks. There is that. I just know that she will be upset if it drops. It was like pulling teeth to get her to actually get the account open and put money into it.

Anonymous wrote:Well, your options are limited for 2018. I think contributions to a solo 401k can be made until April 2019, so you can average them out over that time (but you'll want to confirm that). As for 2019, it's generally better to try to avoid timing, and contribute equal amounts over the year. She should contribute as income comes in, informed by her expectations re how much she'll make over the year.

That's a good point but if his wife already did the contribution into the plan it is sitting there as cash already inside the plan which means she can purchase over any time period. It should like the contribution has already been made. Its just in cash rather than invested.

Well, your options are limited for 2018. I think contributions to a solo 401k can be made until April 2019, so you can average them out over that time (but you'll want to confirm that). As for 2019, it's generally better to try to avoid timing, and contribute equal amounts over the year. She should contribute as income comes in, informed by her expectations re how much she'll make over the year.

There are just as many studies that show a lump sum investment outperforms dollar cost averaging as there are that show the inverse. Honestly, I would just wait for the market to have a down day and make a lump sum purchase. Then never look back.

Who knows where the market will be tomorrow - or next month.

I would drop it in the target retirement fund and know that you did not invest at the high point. (Mid Sept much higher than now)

This 18.5 is 2018 contribution?

Anonymous wrote:Market hasn’t moved at all this year. It’s a totally irrelevant question other than possible matching issue.

Talk about irrelevant... historic market movement has nothing to do with a question of FUTURE dollar cost averaging. It isn't about past movement but reducing the impact of FUTURE down turn by not going all in today and having the market tank tomorrow.

Market hasn’t moved at all this year. It’s a totally irrelevant question other than possible matching issue.

Wife is self employed. She finally opened a 401K plan for herself and dumped the max contribution into it.
I'm wondering whether she should just make one big buy (she wants to just buy into a target retirement fund) or whether she should dollar cost average.
If she dollar cost averages (from cash already in the account to the fund) at what % and over what time frame would you do that?

Note once she calculates her expenses I'm expecting she will dump some more cash that is the company match....

What do you guys think?