Hello all,
So I am just getting started in the investing side of things. It took me a while to figure out where to put my money (403b, Roth IRA, 457, etc) that I am just starting to figure out that where to put the money once it is in those accounts is just as confusing. So with that being said, I have a question.
I am currently putting my monthly contributions to my 403(b), Roth IRA, and Spousal Roth IRAs directly into the Mutual Funds attached to those (403b has a handful of funds, Roth IRAs are just the Total and International Stock Market Index Funds at Vanguard until I have a bit more money in those funds to get the Total Bond and REIT index funds). My initial plan was to continue to put money into those funds under those asset allocations and basically forget about it for months at a time.
Now I have a friends husband who is an accountant and was giving myself and my partners advice a while back. He stated that what he is currently doing is putting his monthly contributions into a Money Market Fund and holding on them. He notes that because the stock market is so relatively high right now, that there will be an inevitable crash, and so he is keeping his money in a Money Market Fund until that happens, then once the stock market is back down or low he will buy into the mutual funds at that time. His plan seemed to be to buy when the stock market was low, ride it until it got high, and then sell back into his money market fund. This was something that he was planning to do with every cycle seemingly.
Is this how it should be done? Am I doing it wrong if I simply put money into the mutual funds and leave it there through highs and lows of the stock market? His idea makes sense to me, but also seems somewhat more difficult than leaving it in there. I am young-ish (30yo, 1st year attending) and thus have a lot of time to go through the ups and downs, but wasn't sure which of these plans I should be trying to do. Thank you for any input!!
So I am just getting started in the investing side of things. It took me a while to figure out where to put my money (403b, Roth IRA, 457, etc) that I am just starting to figure out that where to put the money once it is in those accounts is just as confusing. So with that being said, I have a question.
I am currently putting my monthly contributions to my 403(b), Roth IRA, and Spousal Roth IRAs directly into the Mutual Funds attached to those (403b has a handful of funds, Roth IRAs are just the Total and International Stock Market Index Funds at Vanguard until I have a bit more money in those funds to get the Total Bond and REIT index funds). My initial plan was to continue to put money into those funds under those asset allocations and basically forget about it for months at a time.
Now I have a friends husband who is an accountant and was giving myself and my partners advice a while back. He stated that what he is currently doing is putting his monthly contributions into a Money Market Fund and holding on them. He notes that because the stock market is so relatively high right now, that there will be an inevitable crash, and so he is keeping his money in a Money Market Fund until that happens, then once the stock market is back down or low he will buy into the mutual funds at that time. His plan seemed to be to buy when the stock market was low, ride it until it got high, and then sell back into his money market fund. This was something that he was planning to do with every cycle seemingly.
Is this how it should be done? Am I doing it wrong if I simply put money into the mutual funds and leave it there through highs and lows of the stock market? His idea makes sense to me, but also seems somewhat more difficult than leaving it in there. I am young-ish (30yo, 1st year attending) and thus have a lot of time to go through the ups and downs, but wasn't sure which of these plans I should be trying to do. Thank you for any input!!
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