What to do with new weekly investments
What to do with new weekly investments
I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
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Re: What to do with new weekly investments
Did you stop investing when the market was going up? It is a waste of your time and energy to try to time the market.
Stay the course! It beats the heck of trying to establish a new one every day.
Cheers
Stay the course! It beats the heck of trying to establish a new one every day.
Cheers
Re: What to do with new weekly investments
Fortunately, the markets don't even have to wait a week for Michael Bublé's next album! https://www.michaelbuble.com/NabSh wrote: ↑Fri Jan 21, 2022 12:17 pm I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
Sorry....
Re: What to do with new weekly investments
Yeah, the only reason to hold excess capital in cash is for a properly loaded emergency fund or short term savings goal you don't want subject to market swings. Absent that, just have to follow your AA and ride the current.
Re: What to do with new weekly investments
Stay the course means stay the course. Market fluctuations are unpredictable, so periodic investing as the money comes in is a great option.
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Re: What to do with new weekly investments
The way I look at it is that recent price declines are generally beneficial to my scheduled new investments, since I get to purchase at a lower price. Recent price increases generally benefit prior investments, but price increases do not really benefit my new purchases. I still have at least another 20 years of planned investment purchases, and I'm not interested in leverage to buy future purchases today, so generally I tend to favor recent price declines compared to recent price increases. Unless the reason for price declines affects my industry, which happened in 2008, I'm generally in favor of planning on buying into both price declines and increases. If it was my choice, I'd prefer to buy into lower prices, rather than higher prices.
45% US Indexes, 25% Ex-US Indexes, 30% Fixed Income - Buy & Hold
- arcticpineapplecorp.
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Re: What to do with new weekly investments
can you define "a while"?NabSh wrote: ↑Fri Jan 21, 2022 12:17 pm I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
how will you know when to invest?
if the market keeps dropping, fear has increased (thus people are selling). Do you honestly think you'll be happy to invest when there's maximum fear?
do you have a percentage the market will need to fall in order to deploy cash?
what if the market falls, but not by that much and then goes up and you missed out and will be buying at higher not lower prices?
this happened a few years ago (2018?) when people on bogleheads actually said they were waiting for a 20% decline to buy in, yet the market went down 19% and then went up like 30% the following year. Whoops!
here's what active investors tend to do:
this is what you should do:
and this:
have you read the Swedroe piece Better to Face the Correction? If not, you should. You'll see why investors lose more money anticipating corrections than in the corrections themselves.
what do you think?
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
Re: What to do with new weekly investments
Andrew Tobias in his book The Only Investment Guide You Will Ever Need described an investor or investors (it could have been a club) who sold after the market went down and were waiting for the market to go up before buying again. His response "What kind of a strategy is that?"
You seem to be describing half of this, that is, waiting for the market to go up before buying again.
You haven't described where you are in your investing life, but if you are accumulating (investing now for a fairly long term), you want prices to go down. That way you can buy more shares with the dollars you are investing each week.
You seem to be describing half of this, that is, waiting for the market to go up before buying again.
You haven't described where you are in your investing life, but if you are accumulating (investing now for a fairly long term), you want prices to go down. That way you can buy more shares with the dollars you are investing each week.
Re: What to do with new weekly investments
Whenever my shares are lower, I am very happy to buy new shares at a lower price. There is no way I would have new weekly investment money go to a cash position for a while. Indeed, I am considering selling some fixed income (bonds?) and buying more shares of equities.
Full disclosure: On big up days for stock markets, I consider selling some shares of equities that have gone up in a big way.
Last edited by livesoft on Fri Jan 21, 2022 2:47 pm, edited 1 time in total.
Re: What to do with new weekly investments
Okay. Not exactly sure what the question is here, but I would not try to time the market and go to cash, no matter what you think messengers have been telling you.NabSh wrote: ↑Fri Jan 21, 2022 12:17 pm I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
This isn't just my wallet. It's an organizer, a memory and an old friend.
Re: What to do with new weekly investments
OMG, arcticpineapplecorp! I teach a Personal Finance and Investing course at two local colleges, and I have used a version of "fear and greed are not your friends" images forever, but I might just use these instead. They are just too good! Thank you for posting.
Re: What to do with new weekly investments
Gladly bought more VTI today. OP Look long term, not day to day.
Re: What to do with new weekly investments
Thank you friends for the advice.
This has been good reassuring post .
This has been good reassuring post .
Re: What to do with new weekly investments
If you were willing to invest $X in VTI a month ago, why would the fact it’s 9% lower now prevent you from continuing to invest? In common parlance, that’s called a sale. In investing, it’s the first step towards “buy low, sell high”NabSh wrote: ↑Fri Jan 21, 2022 12:17 pm I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
There are also a number of posts over the path 6 months asking “the market is at an all time high, should I really keep buying?”
Re: What to do with new weekly investments
On the contrary, a down market is a good time to buy. If I wasn't already front-loading my 401(k) as much as my paycheck allows, I would have increased my contributions. What I did do is change how my new 401(k) contributions are invested and they're now going 100% into stocks (US/exUS) instead of a mix of stocks and bonds, because the market is rebalancing for me, these days
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Re: What to do with new weekly investments
Thanks. Full disclosure those images were from the free e-book index funds found at www.ifa.com.seugene wrote: ↑Fri Jan 21, 2022 2:51 pm OMG, arcticpineapplecorp! I teach a Personal Finance and Investing course at two local colleges, and I have used a version of "fear and greed are not your friends" images forever, but I might just use these instead. They are just too good! Thank you for posting.
Mark Hebner does a really good job.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
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Re: What to do with new weekly investments
Have you read this book by Mr. Bogle? The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market ReturnsNabSh wrote: ↑Fri Jan 21, 2022 12:17 pm I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
Retirement is best when you have a lot to live on, and a lot to live for. * None of what I post is investment advice.* |
FIRE'd July 2023
Re: What to do with new weekly investments
No, that's the exact opposite of what you should do.NabSh wrote: ↑Fri Jan 21, 2022 12:17 pm I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
Putting new money into the stock market during a decline should be easy... You're buying on sale!
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
- gmaynardkrebs
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Re: What to do with new weekly investments
You'll get a lot of advice here based on what one should have done based on past patterns, i.e., "stay the course." It isn't very often that such advice is wrong. But once in a while, the odd thing happens, everything changes, and all the patterns of the past are altered. Keep that in mind.
Re: What to do with new weekly investments
What's your advice then?gmaynardkrebs wrote: ↑Fri Jan 21, 2022 6:47 pm You'll get a lot of advice here based on what one should have done based on past patterns, i.e., "stay the course." It isn't very often that such advice is wrong. But once in a while, the odd thing happens, everything changes, and all the patterns of the past are altered. Keep that in mind.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: What to do with new weekly investments
Their site is a treasure trove of other good info, too, I see.arcticpineapplecorp. wrote: ↑Fri Jan 21, 2022 5:31 pmThanks. Full disclosure those images were from the free e-book index funds found at www.ifa.com.seugene wrote: ↑Fri Jan 21, 2022 2:51 pm OMG, arcticpineapplecorp! I teach a Personal Finance and Investing course at two local colleges, and I have used a version of "fear and greed are not your friends" images forever, but I might just use these instead. They are just too good! Thank you for posting.
Mark Hebner does a really good job.
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Re: What to do with new weekly investments
Other way. If stocks are going down buy all the way through the dip.
This is the wrong time to be skeptical for an accumulator.
This time is the same
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Re: What to do with new weekly investments
Whatever the amount of risk he is willing take, take less.HomerJ wrote: ↑Fri Jan 21, 2022 10:52 pmWhat's your advice then?gmaynardkrebs wrote: ↑Fri Jan 21, 2022 6:47 pm You'll get a lot of advice here based on what one should have done based on past patterns, i.e., "stay the course." It isn't very often that such advice is wrong. But once in a while, the odd thing happens, everything changes, and all the patterns of the past are altered. Keep that in mind.
Re: What to do with new weekly investments
Doesn't seem very helpful. How much less?gmaynardkrebs wrote: ↑Sat Jan 22, 2022 1:13 pmWhatever the amount of risk he is willing take, take less.HomerJ wrote: ↑Fri Jan 21, 2022 10:52 pmWhat's your advice then?gmaynardkrebs wrote: ↑Fri Jan 21, 2022 6:47 pm You'll get a lot of advice here based on what one should have done based on past patterns, i.e., "stay the course." It isn't very often that such advice is wrong. But once in a while, the odd thing happens, everything changes, and all the patterns of the past are altered. Keep that in mind.
Obviously, it's a new investor. Any concrete advice you can give?
What kind of odd thing happening are you talking about? The market going down and taking 30-40 years to recover instead 10-15? Hasn't happened yet, but I agree it's possible. How should he prepare for that?
Or are you talking about something else? World War III? Government takeover? All possibilities... What advice are you giving?
It's true that we are not covering every single contingency when we say, "stay the course, just keep investing the same as you always do during a market downturn". But that's still very good general advice.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
- gmaynardkrebs
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Re: What to do with new weekly investments
I don't know enough about this person's situation to get more specific than I did. However, telling him that "stocks are on sale," as you did, is not correct in IMO. Prices are lower because the assets aren't worth what the market "thought" they were worth a month or two ago. They are not "on sale."HomerJ wrote: ↑Sat Jan 22, 2022 2:06 pmDoesn't seem very helpful. How much less?gmaynardkrebs wrote: ↑Sat Jan 22, 2022 1:13 pmWhatever the amount of risk he is willing take, take less.HomerJ wrote: ↑Fri Jan 21, 2022 10:52 pmWhat's your advice then?gmaynardkrebs wrote: ↑Fri Jan 21, 2022 6:47 pm You'll get a lot of advice here based on what one should have done based on past patterns, i.e., "stay the course." It isn't very often that such advice is wrong. But once in a while, the odd thing happens, everything changes, and all the patterns of the past are altered. Keep that in mind.
Obviously, it's a new investor. Any concrete advice you can give?
What kind of odd thing happening are you talking about? The market going down and taking 30-40 years to recover instead 10-15? Hasn't happened yet, but I agree it's possible. How should he prepare for that?
Or are you talking about something else? World War III? Government takeover? All possibilities... What advice are you giving?
It's true that we are not covering every single contingency when we say, "stay the course, just keep investing the same as you always do during a market downturn". But that's still very good general advice.
Re: What to do with new weekly investments
Fair enough.gmaynardkrebs wrote: ↑Sat Jan 22, 2022 2:51 pmI don't know enough about this person's situation to get more specific than I did. However, telling him that "stocks are on sale," as you did, is not correct in IMO. Prices are lower because the assets aren't worth what the market "thought" they were worth a month or two ago. They are not "on sale."HomerJ wrote: ↑Sat Jan 22, 2022 2:06 pmDoesn't seem very helpful. How much less?gmaynardkrebs wrote: ↑Sat Jan 22, 2022 1:13 pmWhatever the amount of risk he is willing take, take less.HomerJ wrote: ↑Fri Jan 21, 2022 10:52 pmWhat's your advice then?gmaynardkrebs wrote: ↑Fri Jan 21, 2022 6:47 pm You'll get a lot of advice here based on what one should have done based on past patterns, i.e., "stay the course." It isn't very often that such advice is wrong. But once in a while, the odd thing happens, everything changes, and all the patterns of the past are altered. Keep that in mind.
Obviously, it's a new investor. Any concrete advice you can give?
What kind of odd thing happening are you talking about? The market going down and taking 30-40 years to recover instead 10-15? Hasn't happened yet, but I agree it's possible. How should he prepare for that?
Or are you talking about something else? World War III? Government takeover? All possibilities... What advice are you giving?
It's true that we are not covering every single contingency when we say, "stay the course, just keep investing the same as you always do during a market downturn". But that's still very good general advice.
They are cheaper, if not "on sale", than they were the last few weeks, so if he was buying stocks each week over the past weeks when the prices were higher, should he stop buying stocks each week now that stocks are down 9%?
Do you think he should instead put his money into cash and then wait for a better time to buy?
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: What to do with new weekly investments
Absolutely not. Beyond that, it really depends on his personal situation, which he did not share.
Re: What to do with new weekly investments
Have an investment policy statement https://www.bogleheads.org/wiki/Investm ... _statement and stay the course!NabSh wrote: ↑Fri Jan 21, 2022 12:17 pm I have set up a weekly investment to total market fund in my brokerage account.
So everyone knows that the market has been down recently. The bear market messengers have been calling for a Buble for a while.
So far I have kept the course. But I have thinking about having new weekly investment go to a cash position for a while.
"Know what you own, and know why you own it." — Peter Lynch