I have an extra $4,000 in my emergency fund... should I invest it today?

[wonderwoman]

Hello,

I basically have $4,000 lying in my account. It's above and beyond my comfortable emergency fund. Should I invest it now that the market is down? Or should I wait longer? What brokerage firm should I use.

Warren Buffett's voice is in my head, "Be greedy when others are fearful."

[Spiffster]

Im probably the last person who should be dispensing investment advice but I think the rule of thumb around here is to dollar cost average, so investing equal portions over a longer period of time. Personally I would invest maybe a little more now, then the rest over the next 6 months or so.

[Jluke]

If you don't have a brokerage you have some homework to do. now is probably not the time to invest until you have that figured out.

Personally, I don't think anyone is really fearful right now. they are being greedy with that flash crash on Monday.

I think they're prepping for a real downturn later.

[phantom]

If you don't already have the money in a brokerage account, you're probably not buying anything today. It will likely take a couple of days to open an account and get your money transferred. If you truly don't have anything else useful to be doing with the money, start researching brokerage accounts now. Take your time making a decision on where you want to have your money and what sort of investment strategy you'll use. There will be other buying opportunities, and you might even find that you'd prefer to avoid market timing anyway.

[JulieAlbright]

If I could advise you on timing the market, I'd be much much richer person.


I agree with the pp. Research brokerage accounts and also types of accounts. Several of the brokerages are often running new account bonuses so look around. Robinhood/Loyal3 both offer commission free trading (which means all your money goes toward investing and not fees) but no retirement accounts or not even joint accounts. Loyal3 is kind of unique in that they only offer a certain number of stocks, but you can invest in fractional shares and it is entirely fee free.

Capital One/Sharebuilder is usually offering a sign-up bonus and they also offer reduced commissions if you invest on a schedule. Tradeking has very low commission rates and Scottrade often has some sort of sign up bonus.

Schwab and Fidelity both offer a nice slate of commission free ETF funds and of course Vanguard is known as THE leader in low cost index investing.

Is this going to be a tax deferred type of investment or a taxable account? Get the account open and then you can start worrying about how and when to invest. Believe me, this is not a once in a lifetime opportunity. The stock market is frequently swinging big one way or the other.

[snafu]

I've no idea of your level of investment knowledge nor what you find to be an acceptable level of risk. If you've contribution space left in your retirement plan or ROTH, you could write out the details that facilitates adding to your plan on a major 'correction' day, merely accelerating your plan.

If this sum is for a taxable account, it's important to have a plan, perhaps having researched 3 possible choices depending on the circumstances of the downdraft market. It's presumed you already have an account to easily buy a Mutual Fund, ETF or chosen stock. I've been waiting since March to buy a specific ETF in a specific price range per unit. When I saw the market free fall, I used my computer to enter a 'bid' for the desired product. I really low balled it and it didn't 'fill' until the 2nd day, near opening. When I checked late yesterday it was trending back up to it's typical 'overpriced' [in my opinion] value. I plan to 'hold' for five years but will re-evaluate the position if needed.

[marywantsmoney]

Do it!

[wonderwoman]

pulled the trigger

Bah! I forgot to check this thread again before acting! What I did was open a Vanguard Roth IRA and invested the money in a low cost index fund (it's a good one - just can't remember the symbol). I ended up doing the full $5,500. I think the buy will take place at 4PM EST.

I feel really good about it. Regardless of the price, I should have done this awhile ago anyway.

Sorry I'm not more patience but I think I made the right moves! Eh?

[TheGooch]

A good strategy is to invest regularly no matter if the market is up or down in the short term. History shows that the market goes steadily up over the long term, so focus on long term investing !!

[JustBill]

Bah! I forgot to check this thread again before acting! What I did was open a Vanguard Roth IRA and invested the money in a low cost index fund (it's a good one - just can't remember the symbol). I ended up doing the full $5,500. I think the buy will take place at 4PM EST.

I feel really good about it. Regardless of the price, I should have done this awhile ago anyway.

Sorry I'm not more patience but I think I made the right moves! Eh?

Congratulations on your decision, and good luck with your outcomes. I've been adding steadily since the middle of last week when the markets began freaking out.

[donald_s]

Best Deal

A 10% correction is not a big deal, so it doesn't matter a whole lot either way. However the $5,500 in the Roth is a *great* move. Congrats.

Donald

[feh]

Bah! I forgot to check this thread again before acting! What I did was open a Vanguard Roth IRA and invested the money in a low cost index fund (it's a good one - just can't remember the symbol). I ended up doing the full $5,500. I think the buy will take place at 4PM EST.

I feel really good about it. Regardless of the price, I should have done this awhile ago anyway.

Sorry I'm not more patience but I think I made the right moves! Eh?

First thing you need to do is come up w/ an investing plan. Trying to time the market is rarely a good idea. When/how you invest should not be affected by what happened yesterday, last week, or last month.

Start educating yourself here: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

[Atretes1]

I dollar cost average through my work sponsored ROTH. I also have a Brokerage account with a mix of ETF's and yes I did throw extra money in during this market fluctuation. I considered the market being down as sale prices....LOL. I don't agree with market timing only in a since where If I market time I am only throwing extra money in it than I normally would which is a win win for me.