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  • First time jitters

    I have been sitting on this decision for a few months, but I HAVE TO put a 6 digit number in my first taxable account (been sitting in my bank until now getting 0.1% interest). At the same time I look at the retirement accounts and lost about $3000 TODAY between all our accounts.

    I know "time in market" > "timing the market" and all that talk on an intellectual level, but is nerve wracking making the step... they are hard earned money, nights spent in hospital and weekends away from the family. I have the stupid app on my iPhone and I've been watching every day stocks plunge in the last couple of months. I'll probably delete it.

  • #2
    Just do it. As long as you have an appropriate emergency fund then you aren't relying on that money in the short term. Do it now. The future you will thank you.

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    • #3
      You should be happy it went down today.

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      • #4
        definitely delete it and stop watching.  it is not improving your quality of life.

        some people it doesn't bother.  you are not one of them.

        acknowledge this, remind yourself you have a good plan, and check in a few months.

        congrats on the big step forward.

         

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        • #5
          a. When your retirement/investment accounts generate more paper gain/losses than you make in take home pay in a month/quarter/year shows you've generated strong financial leverage (i.e. saved a lot) towards FI.

          b.  Agree with others, monitor your accounts as little as possible.  Add to savings aggressively, simple asset allocation with low expense ratio.

          c.  Great job having a six-figure amount to invest for you/your family.

          Comment


          • #6


            nerve wracking making the step
            Click to expand...


            While lump sum investing > dollar cost averaging at least 2/3 of the time, if the fear of investing the lump sum and losing a substantial portion is causing you to not invest at all (worst decision of them all), then perhaps you could divide up the sum into fourths and invest a fourth every month for four months. Or divvy it up however you want but start moving money into the market.

            Alternatively, perhaps your are nervous because your asset allocation is too risky for your actual risk need or tolerance? If that's the case, then dial down your stock allocation to a percentage that makes you feel more comfortable about investing the lump sum. For example, if you were planning on investing this six-figure sum into all stocks, maybe do 70% stocks and 30% muni bonds (as long as it works with your overall investing plan and stated investment goals).

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            • #7
              How about just do a little something.  Something small...  Maybe dollar cost average each month a little bit into an S & P 500 fund, and put some into an Ally CD earning 2%, and perhaps put some towards paying off a debt.  Just do a little something, start small, then put it on autopilot.

              I also tend to sit on big lumps of cash earning 0.1%, but on the other hand I do have the monthly tax deferred and taxable investments on autopilot.  When the market is going up, I allow myself to look.  When the market is going down, I don't look, at all.  This seems to work ok for me.  I was able to stay fully invested consistent with my long term plan through the last crash of a decade ago.

              Comment


              • #8
                A few random thoughts since you don't have a lot of details about your overall financial picture:

                Figure out how much you spend and then with that figure out how much you'll need in retirement (generally 25x that amount for retirement). With that information, you can then get an idea as to how much money you need to save for retirement. Can you get there on your salary alone? If so, you don't really need to take the market risk. But if you're like most physicians (including those here), you'll likely need to invest to reach your "number". Investing and getting market returns also allow you to work fewer years.

                Also, you need to realize your risk tolerance. Look at your portfolio and figure out what dollar amount you'd be ok losing without making changes. If your answer is $0, then you need to invest your risk tolerance. The best way to do this is education. Read some books, read the blog posts, hang around bogleheads forum. Having higher tolerance allows for more risk which generally means higher returns, more money, and a longer and financially secure retirement.

                Oh, and delete that app and never, ever read cnbc. Hawt taeks get more viewers and readers. Good investing does not lend itself to good tv.

                Comment


                • #9
                  Thank you for all your thoughts and advice guys. Much appreciated.

                  We've been blessed with good financial picture... We are both docs 41 and 42yo, no debt whatsoever, 2 small children and only spend about 25% of our income. Already maxing everything in retirements, 529s. No, we do not need that money right now but inflation beats the 0.1% interest (and taxes on interest) so basically we are losing money by keeping them in the bank.

                  Also, big difference in risk tolerance between me and my wife. I'm more conservative. Thought about diversifying into real estate, seems more stable than the market, but I do not have the time nor the constant headache looking for tenants and stuff. And if you hire a 3rd party there is barely any profit left.

                  Like I said, I know rationally that is the best and necessary next step, I have a comfortable risk adjusted allocation in mind, I just can't get myself to do it. I have a vacation in Mexico next week, will probably just take the step then leave - no internet where I'm going.

                  Comment


                  • #10
                    If you can't pull the trigger your AA is wrong. Maybe use this as an opportunity to fix this. Also you missed a free 2% today.....tick tock.....

                    Comment


                    • #11




                      How about just do a little something.  Something small…  Maybe dollar cost average each month a little bit into an S & P 500 fund, and put some into an Ally CD earning 2%, and perhaps put some towards paying off a debt.  Just do a little something, start small, then put it on autopilot.

                      I also tend to sit on big lumps of cash earning 0.1%, but on the other hand I do have the monthly tax deferred and taxable investments on autopilot.  When the market is going up, I allow myself to look.  When the market is going down, I don’t look, at all.  This seems to work ok for me.  I was able to stay fully invested consistent with my long term plan through the last crash of a decade ago.
                      Click to expand...


                      I do not have a white beard (I have no beard), but this is exactly what I do, and it has worked well enough for me over the years.

                      Yo, @Adrian ! My signature line has meaning.

                      Comment


                      • #12




                        I have been sitting on this decision for a few months, but I HAVE TO put a 6 digit number in my first taxable account (been sitting in my bank until now getting 0.1% interest). At the same time I look at the retirement accounts and lost about $3000 TODAY between all our accounts.

                        I know “time in market” > “timing the market” and all that talk on an intellectual level, but is nerve wracking making the step… they are hard earned money, nights spent in hospital and weekends away from the family. I have the stupid app on my iPhone and I’ve been watching every day stocks plunge in the last couple of months. I’ll probably delete it.
                        Click to expand...


                        If it's bothering you that much, that's a sign your asset allocation is too aggressive. Dial it back until it doesn't bother you a bit to lump sum that money in all at once. Surely at 10/90 or 20/80 it wouldn't bother you, right?
                        Helping those who wear the white coat get a fair shake on Wall Street since 2011

                        Comment


                        • #13
                          If you are that risk averse, and you are in a high income tax (SALT) state, consider Munis.

                          Comment


                          • #14
                            I wouldn't dial back your asset allocation. I would just take the long-term view. I saw my portfolio drop in value by about $200,000 over a week or two in February. That paper loss only matters in one of two scenarios:

                            1. It never comes back up. But it has already partially recovered (and has always fully recovered in this country).

                            2. I need to liquidate the portfolio just at the time it has dropped.

                            The likelihood of #1 is vanishingly small. If it does happen, we all owe Crixus / Toe Cheeze an apology.

                            Number 2 could happen in small doses -- if I'm retired and drawing from the portfolio to fund my living expenses, I might have to access money when the market has dropped. This is where fixed income and low volatility assets (bonds, CD ladder, cash) come in handy.

                            My standard windfall advice to someone with the jitters is to lump sum invest half and dollar cost average the rest over 6 to 12 months.

                            Cheers!
                            -PoF

                            Comment


                            • #15
                              if you are living on 25%, it almost doesn't matter how you invest the money.  i really think if you challenge yourself to step a little out of your comfort zone, it will benefit you financially.  i mean if you have it all in cash at 0.1%  even moving it to online banking will increase your returns from 0.1% to 1.4%.  2% if you get cd's.

                               

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