Best way to deploy investable cash in todays market?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Ramec358
Posts: 6
Joined: Tue Jun 28, 2022 7:12 am

Best way to deploy investable cash in todays market?

Post by Ramec358 »

I am new to BH and have enjoyed reading and learning from the many experienced investors.
At age 64 ands retired, I have experienced the many ups and downs of the market over the years , and hopefully have learned from those experiences. Additionally, I have read many Vanguard books including recently the three fund book. I have cash that has been on the sidelines that I am ready to deploy ( 100-200K) I am ready to buy VTSAX or VTI . I will not need the use of this money for 10-15 years or longer and can afford the risk associated with any potential decline. I understand it is unlikely to time the bottom of the market, however, my question is...... Since my outlook is very long term, should I jump in now with all into VTSAX or VTI, or spread out into smaller increments , say 50 k 4 times over a couple weeks or months?
Also, can you use a limit order for VTI at a certain price target vs VTSAX at end of day price. ( I know this is trying to time market a bit but just trying to buy at best entry price. :) ) Thanks
Doohop65
Posts: 125
Joined: Wed Feb 04, 2015 10:54 am

Re: Best way to deploy investable cash in todays market?

Post by Doohop65 »

I would just drop it in and move on. I recently received a large payment and did the same thing. If I’m wrong on timing, so be it. When I have investable resources they go into the market immediately.

I would use vti if you do this in a taxable account. If the market drops and you want to tax loss harvest I have found vti much easier to work with than vtsax. YMMV
User avatar
retired@50
Posts: 12828
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Best way to deploy investable cash in todays market?

Post by retired@50 »

Ramec358 wrote: Fri Jul 01, 2022 8:31 am ...
Also, can you use a limit order for VTI at a certain price target...
Welcome to the forum. :happy

Yes, you can use a limit order for VTI.

For some additional reading on deploying your money into the market, see this wiki page.
https://www.bogleheads.org/wiki/Dollar_ ... s_lump_sum

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
User avatar
AnnetteLouisan
Posts: 7262
Joined: Sat Sep 18, 2021 10:16 pm
Location: New York, NY

Re: Best way to deploy investable cash in todays market?

Post by AnnetteLouisan »

Aside from maxing my tax advantaged accounts and I bonds, I put in around $6k a month lately into VTI by buying smaller amounts a few days per month but just do what makes you most comfortable, understanding it could still drop a lot from here (or not). I worked up to that slowly. Lump sum is widely considered to be the smarter way but I’m afraid to go in at the wrong time and end up regretting.

Have you maxed out your I bonds? That still seems like the best deal available right now.
User avatar
Kenkat
Posts: 9549
Joined: Thu Mar 01, 2007 10:18 am
Location: Cincinnati, OH

Re: Best way to deploy investable cash in todays market?

Post by Kenkat »

How will you feel if you dump it all in and then the market drops another 20%? Will you say “that’s ok, I can’t time the market bottom and this is long term money anyway”? Or will you be bothered that you put the lump sum in just to see it drop further? If the former, lump sum. If the latter, I’d average it in.

Statistically, lump sum is better. However, I never discount the psychology of investing either as that can be a big factor as well.
Topic Author
Ramec358
Posts: 6
Joined: Tue Jun 28, 2022 7:12 am

Re: Best way to deploy investable cash in todays market?

Post by Ramec358 »

Thank you for your replies and advice. I think I will go VTI and put in limit orders to feather it in.
regarding the I bond question, I am not that experienced in bond funds or purchases myself. In the past I have lost a lot of value in bonds in broker managed account ( 2008). My broker previously said bonds are a good counter to stocks as they generally move in opposite directions, Not the case in 2008. I have stayed away from bonds since then and mostly used CD's or savings accounts for my non stocks allocation. Also, in a rising interest rate environment isn't the risk to lose value very high in bonds ? Any education or advice on this would be appreciated
Outer Marker
Posts: 4382
Joined: Sun Mar 08, 2009 8:01 am

Re: Best way to deploy investable cash in todays market?

Post by Outer Marker »

Ramec358 wrote: Fri Jul 01, 2022 10:43 am I have stayed away from bonds since then and mostly used CD's or savings accounts for my non stocks allocation. Also, in a rising interest rate environment isn't the risk to lose value very high in bonds ? Any education or advice on this would be appreciated
ibonds are different. They're issued only by the US treasury, and have a face value when issued, then earn interest at the rate of inflation going foward, (currently 9%). You can't lose money in Ibonds. Only catch is, you're limited to $10,000 in purchases a year per taxpayer, so on $200,000 that's a blip. Still worth doing.

PE valuations on the S&P 500 are still historically high, and if we enter recession, could see valuations at the 3,000 level vs. 3,800 today. Personally, I'd spread it out.
User avatar
AnnetteLouisan
Posts: 7262
Joined: Sat Sep 18, 2021 10:16 pm
Location: New York, NY

Re: Best way to deploy investable cash in todays market?

Post by AnnetteLouisan »

Op, you mentioned limit orders. Will you do good til canceled orders or day limit orders?
Topic Author
Ramec358
Posts: 6
Joined: Tue Jun 28, 2022 7:12 am

Re: Best way to deploy investable cash in todays market?

Post by Ramec358 »

Thanks Outer Marker... the too good to be true is the 15k limit... although might as well take advantage of that

Thanks Annette, Coach me on benefit of each please .
User avatar
climber2020
Posts: 2708
Joined: Sun Mar 25, 2012 8:06 pm

Re: Best way to deploy investable cash in todays market?

Post by climber2020 »

Ramec358 wrote: Fri Jul 01, 2022 8:31 am At age 64 ands retired, I have experienced the many ups and downs of the market over the years , and hopefully have learned from those experiences.
Ramec358 wrote: Fri Jul 01, 2022 8:31 am I have cash that has been on the sidelines that I am ready to deploy ( 100-200K)
1) What did you do during previous stock crashes?

2) Why do you have 200k in cash "on the sidelines"? Windfall, sale of something large, or timing the market?
Topic Author
Ramec358
Posts: 6
Joined: Tue Jun 28, 2022 7:12 am

Re: Best way to deploy investable cash in todays market?

Post by Ramec358 »

1. in previous market crashes I did nothing.... just waited it out....other then a lucky intuition in the summer of 2008 to move my 401k to cash...then back in in 09

2. actually have much more in cash as well is in equities overall.... have a mix of approx 35-40% of. non Real estate assets in stocks in various forms..

just trying to take many lessons learned over many years and buy when market is down vs sell or do nothing ..... If that makes sense
User avatar
AnnetteLouisan
Posts: 7262
Joined: Sat Sep 18, 2021 10:16 pm
Location: New York, NY

Re: Best way to deploy investable cash in todays market?

Post by AnnetteLouisan »

Ramec358 wrote: Fri Jul 01, 2022 11:38 am Thanks Outer Marker... the too good to be true is the 15k limit... although might as well take advantage of that

Thanks Annette, Coach me on benefit of each please .
I was hoping you would tell me! 😅

Day orders are good because you are in and out with no waiting and can do other things with your day while maybe getting near the intraday low.

Good till canceled orders let you set your price and not have to monitor the market - but you may miss out entirely if you don’t get your price.

Lump sum is preferred on this Board though!

Op, observe all the other steps in the Bogleheads getting started wiki, including writing an IPS, maxing tax deferral and setting a proper AA that reflects your risk tolerance. Day limit orders is NOT viewed as the right way to invest.

A good til canceled (GTC) order is say I want 100 shares of VTI but only at $160 a share. No idea if it will ever go that low, but the order stays in for days or weeks until it does, or until I cancel it. I never did that though.

OP you mentioned feathering in the funds so I thought you had GTC orders in mind at different prices.
Last edited by AnnetteLouisan on Fri Jul 01, 2022 3:16 pm, edited 37 times in total.
User avatar
Wiggums
Posts: 7051
Joined: Thu Jan 31, 2019 7:02 am

Re: Best way to deploy investable cash in todays market?

Post by Wiggums »

We are retired and buying more stock during this downturn. We schedule the purchases since we buy mutual funds. It would invest 50-100k at a time.
"I started with nothing and I still have most of it left."
WhiteMaxima
Posts: 3338
Joined: Thu May 19, 2016 5:04 pm

Re: Best way to deploy investable cash in todays market?

Post by WhiteMaxima »

Dollar cost averaging in
User avatar
HMSVictory
Posts: 1715
Joined: Sun Nov 01, 2020 6:02 am
Location: Lower Gun Deck

Re: Best way to deploy investable cash in todays market?

Post by HMSVictory »

Depends on your overall portfolio. If your at the 20M level its irrelevant. :shock:

On a serious note since you are concerned with valuation your best bet is to DCA into the market over a year or two.

If it goes down a lot you will be happy. If it goes up a lot you won't have missed much but you will capture the gains moving forward.

Downside risk is much more painful than FOMO of upside return.
Stay the course!
logiclife
Posts: 206
Joined: Tue Apr 26, 2011 6:11 pm
Location: Windy CIty

Re: Best way to deploy investable cash in todays market?

Post by logiclife »

I went in lumpsum in May in to VTSAX and then....

But I have no regrets as I have a 10 yr horizon.

Not sure your regrets/risk appetite is, I would do DCA across rest of the year. All the best
7eight9
Posts: 2406
Joined: Fri May 17, 2019 7:11 pm

Re: Best way to deploy investable cash in todays market?

Post by 7eight9 »

In the words of Clint Eastwood, "You've got to ask yourself one question. Do I feel lucky?"

Lump sum typically beats dollar cost averaging.

Except when it doesn't.

Investors who lump summed into the Nikkei in December 1989 regret their decision to this day.
I guess it all could be much worse. | They could be warming up my hearse.
Lightheart
Posts: 1
Joined: Fri Jul 01, 2022 10:33 pm

Re: Best way to deploy investable cash in todays market?

Post by Lightheart »

You might consider the ideas suggested in Michael E Edleson's book entitled Value Averaging, a modified means of deploying large sums into the market.
User avatar
burritoLover
Posts: 4097
Joined: Sun Jul 05, 2020 12:13 pm

Re: Best way to deploy investable cash in todays market?

Post by burritoLover »

Here's a portfolio of the S&P 500 starting after it dropped 20% from the dot com high in 2001 (dividends reinvested) and the following 8 years. Probably seemed like a great time to lump sum some money - being in a bear market at the time in 2001, but 8 years later and the hurt is being put on you big time. Stocks are risky - it is important to understand what this means - especially if you are bit jittery. Not saying DCA is the answer but you might want to mitigate some of that risk with some fixed income.

Image
Topic Author
Ramec358
Posts: 6
Joined: Tue Jun 28, 2022 7:12 am

Re: Best way to deploy investable cash in todays market?

Post by Ramec358 »

Thank you all for your input
Post Reply