Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

Lowest point so far.

Not sure if there's a deceased feline that's past apogee.

 

My father had some financial knowledge, but was terrible at following it. I have tried to not follow in his footsteps too much. Also, my company just pulled 401k match. Sad...

 

Yea that’s what I’m worried about, might go even lower once companies’ quarter numbers start showing up and they’re worse than expected. Unemployment is just gonna increase too.

i know if I buy now I’ll still be in the green in the long run but if I wait until it’s lower, I’ll be even greener!

 

Mine too buddy, mine too.

 

Yup. We all share the same concerns.

Best you can do is average down without getting into trying to catch a falling knife.

 

I went from 8 to 10.

Always put in enough to get the max employer match, regardless!

We get both. Matching half up to 4% (So anything less than 8 and you're throwing money away), and then also a contribution of....5%? Can't remember, that is regardless of your contribution, I believe so long as you actually contribute. So if you don't contribute to the 401k, they don't either. Could be wrong on that. It's been a while.

Best quote I heard: The best time will always be yesterday.

We haven't pulled 401k match yet, but I can't foresee them not doing it. Just haven't yet.

 

Mine was on the flip side - he was actually pretty good at doing as he said. I'm a bit freer with my purse-strings - but still live well within my means. My only debt is in mortgages and my truck loan -- but that loan was 1.3% from a credit union in Sept 2016 so it woulda been more expensive to pay cash. I'm also just about paid off.

 

Roth IRA question: assuming stable markets, is it better to invest the 6K limit all at once at the start of the tax year or at steady increments with each paycheck? I can afford to do either

 

Thankfully, I'm receiving a military retirement, plus disability. My previous employer would match 1/4 of what I put in, up to 3%. My current employer contributes 14%, regardless of what I put in.

 

Yes.

Dollar cost average or time in the market. Pick your poison, there's no right or wrong answer here. If it was me, right now, I'd consider just dumping the 6k in for this year in the current "situation", but otherwise it's really a matter of DCA or not DCA, and there's no right or wrong answer (in the scope of a 1 year timeframe).

https://investinganswers.com/dictionary/d/dollar-cost-averaging

 

I'm not a tax advisor, but I'd say the sooner your earnings on that 6K are tax-free the better.

 

If you can do all at once do it. That leaves cash in your account to act on any surprise market moves. You can't buy low if the cash isn't there.

 

The way I do it is I just put forth a little bit, maybe a third and if it goes down I buy more to try and lower the average. The only problem with that though is that if it goes up then you miss out.

Edit: Scratch that this comment was for a Roth. Sorry.

 

Full lump sum. And invested, not just sitting in cash in your account. The market goes up a lot more than it goes down, so holding out in cash on the potential the market goes down is a losing bet

 

Good info, thanks yall

 

No real way to know. Last few years doing it beginning of the year and watching it go up would have been the thing to do. But had you done that this year, you would be down 20% on that 6000 only a couple months later. If you waited until a week or 2 ago to put in your 6000 for 2019 and 2020, you’d have been pretty smart, or just lucky. Best thing to do is just pick what method works for you.

 

I’ve posted this before, but a Vanguard study found that lump sum usually outperformed dollar cost averaging: https://investor.vanguard.com/investing/online-trading/invest-lump-sum

The way you’d be doing it though if you did $6k per year, every year, is actually a form of dollar cost averaging. It is also kind of lump sum. Probably wouldn’t matter much either way in this specific situation.

 

I like that way of thinking that doing it per year is DCA in theory.

That said, you're looking at a windfall lump sum vs DCA, where as OP is only ("only") talking 6k, which isn't quite a "windfall". If I got 100k tomorrow, yeah I'd dump it all in rather than DCA. Interested to see if anyone has run numbers of doing DCA vs. lump sum with IRA investments. My theory, it'll be a wash. In which case, 6k lump sum and don't have to think about it until next Jan 1, how I'd do it.

 

I agree, I'd dump the $6k in immediately when it was possible. It is probably going to end up slightly better in the long run since markets go up more than they go down.

 

https://www.forbes.com/sites/mayaka...t-time-to-put-money-in-your-ira/#454a47c83eef

Without digging into the google rabbit hole more....long of the short, do what you want? Long term it won't make much difference. So, flip a coin I guess. I'd do lump sum now though for 2020 and 2021 do whatever you prefer.