Pile up cash, or stay the course

[Turf Doc]

This is a dumb stat. The best days come after the worst days, its just simple volatility clustering. Turns out if you missed the whole week of best days, you actually outperform, because you missed a whole lot of worst days coming into that "best day".

I dont think it is.. the point is that a lot goes on when youre on the sidelines and it's basically impossible to only be in during the good times. Market timers lose plain and simple - this is just an extreme (and yes unrealistic) example of the consequences

[Turf Doc]

Something that always helps me look at things from a new perspective is looking at old forum posts on bogleheads and the like. People in 2016 who said the exact same things, saying it's getting frothy, etc etc. And what would have happened if got out in 2016? Lost out on a lot, thats what.

[Tim]

Behavioral finance:
1) Want to miss the worst day, worst week, worst month, worst year.
2) Want to catch the best day, best week, best month, best year.

All you have to do is pick when to get in, get out, and back in. Fear of loss is stronger than rush of gains. That is why one sits in cash.

The only way to lose is not to ride. Ride every bull you can. If you get thrown off, so what, get back on as soon as you can. Guaranteed loss if you don’t get on, inflation will kill you.
Have a plan to invest as soon as you can. Get your emotions out of it. Make a plan and follow it. Worrying is not an actionable emotion.

[Tangler]

Advice:
1. update an IPS that you can live with.
2. Keep AA according to IPS
3. Keep investing in VTI or VTSAX
4. Turn off the news (it is terrible and annoying anyway with little helpful info and plenty of info designed to anger, enrage, and scare)
5. Focus time on activities that bring fulfillment and improvement.

I need to do same.

[RJB]

Advice:
1. update an IPS that you can live with.
2. Keep AA according to IPS
3. Keep investing in VTI or VTSAX
4. Turn off the news (it is terrible and annoying anyway with little helpful info and plenty of info designed to anger, enrage, and scare)
5. Focus time on activities that bring fulfillment and improvement.

I need to do same.

But where’s the fun in that!?!? Lol

[billy]

This is something I really struggle with. I was fine investing from 2011 - 2013 but ever since then I put less and less money to work. And the market just keeps marching higher. I put some money to work in April and the summer of 2020 but not enough and the market kept ripping higher. So I'm overweight in cash and only take small positions because the market is expensive, yet keeps going higher. It seems like every year it gets harder and harder for me to pull the trigger and put my money to work.

You are one of the ones who would benefit from someone else managing your money. Try for as low a fee as possible, but the fees would probably be worth it in your case. No shame if you can recognize your fear/paralysis and let someone else handle it.

[Tim]

But where’s the fun in that!?!? Lol

Investing is boring. Find adrenaline rush in something else.It is cheaper in the longer run.

[jfoxcpacfp]

Investing is boring. Find adrenaline rush in something else.

Actually, investing done right is boring. There are many ways to get your pulse up in investing. Watching the market crash in 2000 really got my heart rate up! Not as much in 2008, but it did for a lot of ppl!

[beagler]

You are one of the ones who would benefit from someone else managing your money. Try for as low a fee as possible, but the fees would probably be worth it in your case. No shame if you can recognize your fear/paralysis and let someone else handle it.

Or learn from your mistakes. I did this 20 years and 2 market cycles ago. Subsequently went all-in and stayed fully allocated since.

[Panscan]

I dont think it is.. the point is that a lot goes on when youre on the sidelines and it's basically impossible to only be in during the good times. Market timers lose plain and simple - this is just an extreme (and yes unrealistic) example of the consequences

but the more over arching point is that the best days are usually immediately after horrible days , so scenarios such as “ missing the best 10 days “ don’t happen in reality bc you’d also miss some big loss days. As referenced before it’s just volatility spikes.

[Ronan]

"time in the market is better than timing the market". Like clockwork, every week I buy regardless of what the market is doing at this moment.

[Ronan]

I know you can’t time the market. I know this. And I also know that the correct answer to the question I’m about to ask, is to stay the course, but dang it I can’t help but think. Can’t help but to wonder. I think, based on the ever brewing wave of COVID-19 and ensuing restrictions that we are headed for a rocky 3rd and 4th quarter of 2021. Should I hoard cash maybe sell some bonds and wait for the dip? It’s getting harder and harder to buy overpriced VTI.

How many more years till you need this money? If within 5-7 years put into bonds, otherwise put it into your regular allotment.

[Panscan]

5-7 way too conservative. How often has a 100% equities allocation been down for a 5-7 year period

[TheDangerZone]

5-7 way too conservative. How often has a 100% equities allocation been down for a 5-7 year period

Quite a few. It took that long for the S&P to recover after both the dot com and GFC although I do not think dividends are included.

[jfoxcpacfp]

How many more years till you need this money? If within 5-7 years put into bonds, otherwise put it into your regular allotment.

We typically use up to 5 years planned need for cash/bonds/CDs and beyond that, well-balanced diversified equity fund portfolios, rebalanced annually. 5 years is typically, at least impo, the outer limits of what you can plan for with exactitude.