First time jitters

[Adrian]

Thank you for replying to my question. I will keep some money in TIAA anyway since I have some annuities there which would take 10 years to transfer (started that account as a resident knowing nothing so I have no idea how I got stuck with them...they are part of their "traditional" funds). Is less then 10k, so really not worth the headache of doing this over 10 years.

[jhwkr542]

Adrian wrote:

2. Unrelated question… What is so special about TIAA REITs? I have an old 403b with them and thinking of rolling it into my current one, but seems like the keymaster

likes that particular fund. I probably have about 10% of my portfolio in that plan, so I could definetely make part of it that my REITs location.

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Rolling the 403b over into your current 403b?  Just trying to clarify the situation.  I like TIAA real estate as part of a real estate portion of a portfolio, but if you want to consolidate accounts and this sacrifices TIAA real estate for Vanguard REIT, the simplicity might be worth it.

[Craigy]

Just roll it in in $10k or $20k increments over a period of months, if it makes you feel better.

[Hatton]

Do it now!

[Adrian]

OK, going on a 10 days vacation overseas tomorrow with no internet. Question is, put the rest of about 100k in the VTSAX tonight or wait to come back?

I know, I know, I am trying to time the market

[q-school]

Adrian wrote:

1. Pulled the trigger last nigth and started with $10,000 in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) just to put my toes in the water. I had to learn about difference between mutual funds and ETFs at 10PM, since I could not find the VTI fund when I placed my order…

2. Unrelated question… What is so special about TIAA REITs? I have an old 403b with them and thinking of rolling it into my current one, but seems like the keymaster

likes that particular fund. I probably have about 10% of my portfolio in that plan, so I could definetely make part of it that my REITs location.

Click to expand...

awesome!  don't question it.  just leave it and let it grow.

 

 

[Donnie]

Adrian wrote:

1. Pulled the trigger last nigth and started with $10,000 in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) just to put my toes in the water.  I had to learn about difference between mutual funds and ETFs at 10PM, since I could not find the VTI fund when I placed my order…

2. Unrelated question… What is so special about TIAA REITs? I have an old 403b with them and thinking of rolling it into my current one, but seems like the keymaster

likes that particular fund. I probably have about 10% of my portfolio in that plan, so I could definetely make part of it that my REITs location.

Click to expand...

Great job starting to get your cash position invested.  The REIT question is easy - no REITs in taxable.

[Adrian]

1. Pulled the trigger last nigth and started with $10,000 in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) just to put my toes in the water. I had to learn about difference between mutual funds and ETFs at 10PM, since I could not find the VTI fund when I placed my order...

2. Unrelated question... What is so special about TIAA REITs? I have an old 403b with them and thinking of rolling it into my current one, but seems like the keymaster

likes that particular fund. I probably have about 10% of my portfolio in that plan, so I could definetely make part of it that my REITs location.

[Donnie]

I would dollar cost average into stocks by investing an amount you are comfortable with each month over a year or so. I wouldn’t do a heavy bond allocation. The good news is that you will presumably be saving more money over the next year. Your cash position will continue to rise if you don’t take action now and start investing at least an amount equal to your monthly average savings from your paycheck. The larger the cash position becomes, the harder it will be to put it to work.

[White.Beard.Doc]

Adjusting asset allocation to a bond heavy portfolio doesn't sound all that great.  Could we be potentially be facing many years of slowly rising interest rates that will continuously drive down the value of bonds?  Who knows, but that certainly seems like one potentially likely scenario at this moment in time.

Given that possibility, I would not feel very comfortable going into a 10% stock and 90% bond portfolio at this juncture.

[q-school]

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.

 

[PhysicianOnFIRE]

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

[Marko-ER]

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

[The White Coat Investor]

Adrian wrote:

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.

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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?

[VagabondMD]

White.Beard.Doc wrote:

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.

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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.