Govt shutdown... Invest now-ish?

[ua_guy]

I've got an IRA full of money that's sitting in cash. I started a thread previously and it looks like I want to move it into one of Fidelity's managed Index funds. I'm ready to pull the trigger but I want to do it strategically.

It seems to me that as the market gets more and more nervous approaching the 10/17 deadline for debt ceiling talks that the market will continue to shake and drop lower. This is, of course, assuming that talks will be fruitful and the government will resume opeations here in the near future.

Is my strategy in trying to buy with cash at a relative low point a sound idea? Am I missing anything with regards to index funds?

[feh]

Is my strategy in trying to buy with cash at a relative low point a sound idea?

No, not in my opinion. This is market timing; more often than not, it's a bad idea.

You're saving for retirement, which is a long ways off. No time like the present to get your money working for you.

[disneysteve]

I've got an IRA full of money that's sitting in cash.

Is my strategy in trying to buy with cash at a relative low point a sound idea?

How long has the money been sitting in cash?

I just checked some of my accounts and looked at year to date performance.

VIGAX - 19.97%
VGHAX - 29.28%
VFIAX - 19.76%
JAGAX - 17.35%
HRTVX - 19.87%

The point is look how much you've missed out on by sitting on cash waiting for a "better" time to invest.

MARKET TIMING DOESN'T WORK.

The best time to invest is always right now.

[ua_guy]

The money is in an IRA and it was (is) in cash reserves temporarily, for about 2 months. The reason is because I was completing a real estate transaction and under one calculation, I'd need a good chunk of that money. Having it in cash reserves makes those funds available within 24 hours.

I took an insane amount of risk with this real estate transaction but ended up accomplishing my goals, walking away with all my retirement savings intact, and also walking away with a healthy cash savings. Now I'm ready to put that money back in "drive" and tie it up in the market where it can start earning again.

My thought was, if I can buy back into the market in the next two weeks if it drops 10-20% with the threat of debt negotiations, I can easily make that back plus normal annual return. It just seemed like an easy boost, is all, and minimal wait time (1-2 weeks).

[bigdaddybus]

I would stay on the sidelines over the next two weeks.

The current market decline has very little volume. It is not a selloff, but there may be one over the next couple weeks before a debt ceiling agreement is made.

The probability of making a good return before a debt ceiling agreement is reached is very low IMO. The probability of a market pop after an agreement is decent. So be ready to move and know what you plan to buy.

I am a long index investor with the majority of my retirement money. I currently have 30-40% of my retirement investments in cash. Most all my trading account is in cash and options shorting the market until the debt ceiling agreement is reached.

[MakeAStash]

Not enough decline yet IMO. A 10% dip, if it happens, would encourage me to invest a portion of cash. The larger the dip, the more I'd invest. One strategy is at http://www.fool.com/investing/genera...t-crashes.aspx

[Wino]

The best time to invest is usually right now.

I agree with the sentiment, but I changed it slightly. I agree. I'd sit out at least a couple of more weeks. The market is in a decline. Let's see how far it goes before you put your money in the market. This isn't timing to try to get a "lowest point," but a timing of "at least wait until it stops going down for a few days." Right now, you're probably best off waiting until there's a slight uptick, or until you absolutely MUST buy because "it won't go any lower than this..." (though 2008 should tell you that bottoms are usually way below where you think they might be).

Edit: I invest every month, so this doesn't apply to me, personally. I don't have a wad of cash sitting out waiting to be invested.

[bjl584]

If you have a small percentage of your portfolio that you can stand to lose, then buying a few positions in the dips might be a good idea. If you are following a few different stocks and funds, and we do end up with a correction, then buying low if the fundamentals are telling you that the positions are oversold may be a good strategy.

[Strevlac]

No one has any idea what the market is going to do. Market prices reflect all known information at any point in time. Did anyone know yesterday that we would have a 2% rally today?

Never base your investment decisions on day to day noise. This debt ceiling thing is qualifies as noise.

Invest according to your willingness, need, and ability to take risk. Decide on a mix of equity and fixed income per your risk tolerance. Choose low cost, passively managed investment vehicles. Hold your nose and go all in or dollar cost average over the next few months. Rebalance periodically. Accept what the market gives you and stay the course.

[feh]

Just wanted to point out that the S&P 500 is up about 4.5% since this thread was started. Here's some good advice I came across this morning:

http://money.cnn.com/2013/10/18/pf/expert/401k-debt-ceiling/index.html?iid=HP_LN

Assuming you're investing for the long haul, don't try to time the market.

[disneysteve]

My thought was, if I can buy back into the market in the next two weeks if it drops 10-20% with the threat of debt negotiations

Just wanted to point out that the S&P 500 is up about 4.5% since this thread was started.

So using hindsight to support what many of us said earlier, rather than seeing a 10-20% drop, we actually saw a 4-5% increase. Everyone who was sure the market was going to drop so they waited on the sidelines lost out on a nice bump in values.

don't try to time the market.

Bingo! As many of us have said repeatedly.

[bigdaddybus]

In the words of Jim Cramer "I dont have to be right all the time, I just have to be right more often than I am wrong to beat the market"

My father has taught me to keep a majority of my money in funds over the years, but study individual stocks, use options, and take risks with some of it. because......
1. Sometimes they pay off unbelievably HUGE
2. it keeps you interested in investing

My daughter, age 13, her first investment this year was 20 shares of FB at $25. Currently trading for over $50 in 4 months. Should she have bought a Vangaurd index fund? maybe, but my she is very interested in investing.
She is currently working with me/and a teacher at school to determine what her next purchase should be (as her babysitting money accrues) I am pushing for an low fee international index fund.
She also wants to sell half of her FB position and start another $500 position in something else. Also from Dads encouragement.

There are many roads to financial prosperity. Conservative investing is just one of them IMO.

and I hope everyone on the forum retires early, makes great returns, and shares their love of investing/money management with others....as the average person in this country needs all the help they can get