Pile up cash, or stay the course

[RJB]

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.

[billy]

Vti's "been overpriced" for over 5 years based on who you listen to. I'm sure glad I've been investing the whole time.

[Notsobad]

Stay the course.
if you have bonds, wait for the drop, sell some bonds and buy stocks into your allocation.

good luck

[CordMcNally]

From a political standpoint, restrictions (especially any kind of shutdown) that we saw last year will be a non-starter with the mid-terms coming up.

From a financial standpoint, it’s always best to stay the course. Significant dip may not come until the market has doubled again. Besides, who says VTI is overpriced? Historical data? Maybe historical data is underpriced.

[Turf Doc]

between 2005 and 2020, if you missed the best 10 days in the market, you cut your return in half. You that confident?

[RJB]

between 2005 and 2020, if you missed the best 10 days in the market, you cut your return in half. You that confident?

Nope!

(To your question of my confidence, not your incredibly pertinent historical fact)

[xraygoggles]

Should I hoard cash maybe sell some bonds and wait for the dip? It’s getting harder and harder to buy overpriced VTI.

Why would you sell bonds if you are expecting a crash (also not clear how you can expect a crash for sure)?

You should buy more bonds, then sell them for stocks during the aforementioned expected crash.

[RJB]

Why would you sell bonds if you are expecting a crash (also not clear how you can expect a crash for sure)?

You should buy more bonds, then sell them for stocks during the aforementioned expected crash.

I suppose that’s what I meant. I just don’t know why I have the bonds I do have, lol. Itching to do something else with that money.

[Tim]

Why would you sell bonds if you are expecting a crash (also not clear how you can expect a crash for sure)?

You should buy more bonds, then sell them for stocks during the aforementioned expected crash.

Fear of interest rates rising? Cash doesn’t lose value in the short duration. Good luck with “hunch” trading. Short term fear of loss on bonds to. Dry powder mentally on fear.

[xraygoggles]

Fear of interest rates rising? Cash doesn’t lose value in the short duration. Good luck with “hunch” trading. Short term fear of loss on bonds to. Dry powder mentally on fear.

Well, so far this year, Treasury yields (and bonds) have done things which most investors did not expect, and I expect that to continue going forward.

aka 'no one knows nuttin'

[Practice]

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.

[jfoxcpacfp]

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.

Wow, what did you do in March 2020 and since then? A little scary if you kept accumulating cash. Wonder how many times over you could have paid for some good financial planning with all of the growth you've given up with your conservative stance...

[Zaphod]

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.

It would be crazy if we had some massive wave and new restrictions now, when its mostly localized and hospitals arent overwhelmed, etc.....its a crazy idea and isnt happening. I would not use that as a reliable thesis for the market, remember though we were lower when it happened the economy was also much worse but fall/winter wave was horrendous yet we just kept rocketing.

we're pricey but this doesnt seem like a good r/r trade, what are your re-entry points and how do you know if you're wrong and just re-enter anyway and maybe higher? If you dont have that its not wise even more so.

[Zaphod]

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.

Meanwhile you keep losing. Stop doing this or put someone else in control of your money, you basically missed out on one of the best runs ever. You had a second chance and mostly missed that too. Let someone else manage your money in a reasonable way and tell them not to let you be allowed to influence it.

[Zaphod]

between 2005 and 2020, if you missed the best 10 days in the market, you cut your return in half. You that confident?

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".