Max Roth or wait until market calms down

[cologero]

Hello. I've been maxing my Roth for the past 3 years and am ready to do it again in 2017. With prices rising and all the hysteria going on lately, should I wait another month or two before contributing the max? Currently I'm 38 and have a Vanguard account that is 77% Domestic stocks and 23% Domestic bonds, and I was planning on keeping the same ratio.

Thanks in advance for any advice.

[My English Castle]

Spread it out?

I'd put the money in the account, but most of it in the Money Market--just a bit in the stock funds.

[StormRichards]

In my opinion, NO.

My DH's yearly bonus will be in his 2/28 paycheck. We are still discussing what to do with the money, but maxing out our Roth's is receiving serious consideration. If we go another direction, it won't have anything to do with what the market is doing today.

[cologero]

Thanks for the input. I'm definitely leaning toward contributing now since I look at it as "what's a few months when it'll be invested for another 25+ years anyway?"

I currently have a ROTH, Traditional IRA, and 401K and none have a ton of money in them. I know the key with investing is compounding interest, so I was thinking of dumping most of this year's contribution into my Admirals Shares to grow that and hopefully take more advantage of the interest. Is this bad thinking? Should I come tribute to a less risky fund (and have yet another small account to try and squeeze interest out of), or are index funds still ok?

[TexasHusker]

Markets don't calm down.

[cologero]

Markets don't calm down.

Helpful post

[SavingSteve]

Don't try to time the market. Nobody can see the future. It's better to invest consistently according to your risk tolerance.

[kork13]

"what's a few months when it'll be invested for another 25+ years anyway?"

This is exactly the right attitude, and also your answer. The difference between now and 6 months from now is peanuts compared to the difference between now and 25 years from now. As you'll often hear around here, "it's all about time IN the market, not timING the market". If you have the money available to invest it right now, do it.

[~bs]

I'd make the contribution. If youre looking to invest it in a stock fund, maybe wait for a DJIA pullback to 20k.

[corn18]

You will never get that tax advantaged space back. Fill it up and put it in cash if that fits your risk tolerance, but most of all, fill it up.

[StormRichards]

You will never get that tax advantaged space back. Fill it up and put it in cash if that fits your risk tolerance, but most of all, fill it up.

The OP was only questioning whether to wait a month or two to max out, not suggesting they wouldn't max out at all in 2017.

[disneysteve]

With prices rising and all the hysteria going on lately, should I wait another month or two before contributing the max?

Markets don't calm down.

Don't try to time the market.

If you have the money available to invest it right now, do it.

The OP was only questioning whether to wait a month or two to max out, not suggesting they wouldn't max out at all in 2017.

I agree with the others. You should invest when you have the money available to invest. The sooner you put it in the tax shelter, the better. Forget about trying to time the market. Two months from now the market could be down 10% but it could also be up 5%. Nobody knows. Just keep investing steadily over time and ignore the gyrations of the indices.

[Like2Plan]

This is where an Investment Policy Statement (IPS) comes in handy.
Link to IPS

You create your own business rules when it comes to investing which will guide you.

You determine your allocations. You determine at which point you will re-balance your portfolio (if at all).

It takes some of the emotion out of current market conditions. Then, it is just a matter of following your plan.

[rennigade]

Why not just spread it out over the course of a year? The 1st of every month put $450 in then in december top it off. Thats what I do.

There are arguments that sticking it all in on jan 1 is just as good if not better than DCAing.

Time in the market is better than timing the market.

[disneysteve]

There are arguments that sticking it all in on jan 1 is just as good if not better than DCAing.

Time in the market is better than timing the market.

Putting it all in on January 1 IS dollar-cost averaging. It doesn't have to be monthly. Once a year for 40 years is a form of DCA.

The sooner you get the money in the tax shelter, the better. I have maxed our Roths in January some years. If we have the money, we do it. Most years, we aren't able to do that but I max it as soon as we can.