Investment Timing

[disneysteve]

What is the most efficient use of dollar cost averaging? Twice monthly? 4 times a month? Daily? Once monthly?

I am wondering if it makes any difference.

If you have a long time horizon, like decades, it really makes no difference. Even once a year (like OP does) counts as DCA over the course of 30 years.

Folks with 401k/403b plans invest with each paycheck. Folks funding plans on their own like a Roth may set up an automatic monthly withdraw from their account.

Personally, at the moment, I've been doing it quarterly just because that's how our cash flow has worked this year. In the past, I've done it monthly or even as a lump sum in January when we had more free cash to do so.

[Singuy]

If you don't need the money for years/decades, why do you care what the value of the investment is in 12 months?

https://www.bogleheads.org/wiki/Bogl...ime_the_market

Because a wasted year is a wasted year. If I put 100k into the market today and the market is flat or down for the rest of the year, that's a lot of interest I could of been compounding elsewhere but instead the time was all wasted in the market doing nothing.

And as of right now with Trump as the president, who knows where the market is going to do since the guy doesn't really understand world economics(he only know real estate and business). One of his tweet can crash the stock market....or rally..who knows...

[rennigade]

Time in the market is much more important than timing the market.

Formulate a plan and stick to it.

[feh]

Because a wasted year is a wasted year.

With that mindset, you are relegated to timing the market. Such people usually see worse results.

It's a matter of ignoring your emotions and trusting the numbers. Some people can, some people apparently can't.

[corn18]

Since this thread was started, the S&P 500 has gone up 1%, so you missed $55 in growth thinking about it.

You are approaching this incorrectly. Develop a financial strategy and then just follow it.

Go here and and get a strategy:

https://www.bogleheads.org/wiki/Getting_started

Then stick to it. Everyone has been grousing about bonds going down. About time they went down. They are stupid low, yield wise, so they need to go up. My bond funds have gone down so guess what I did? I bought more because my asset allocation was getting a little tilted towards stocks and I had some money I hadn't invested yet. Now I'm back to 65/35 and feeling good.

When I got my bonus this year, I dumped it all in at once. I'll do the same next year. What I buy (stocks or bonds) will be determined solely by my asset allocation.

This no brainer approach suits me well.

Tom

[TexasHusker]

Investments tend not to operate on a calendar. Days, hours, and minutes are merely man's invention to measure time. I've always been amused at how everyone - including investment advisors - want to press a "re-set" button on January 1, when in fact it is only a day after December 31, and neither have any influence over how profitable an investment is or was.

[Singuy]

Since this thread was started, the S&P 500 has gone up 1%, so you missed $55 in growth thinking about it.

You are approaching this incorrectly. Develop a financial strategy and then just follow it.

Go here and and get a strategy:

https://www.bogleheads.org/wiki/Getting_started

Then stick to it. Everyone has been grousing about bonds going down. About time they went down. They are stupid low, yield wise, so they need to go up. My bond funds have gone down so guess what I did? I bought more because my asset allocation was getting a little tilted towards stocks and I had some money I hadn't invested yet. Now I'm back to 65/35 and feeling good.

When I got my bonus this year, I dumped it all in at once. I'll do the same next year. What I buy (stocks or bonds) will be determined solely by my asset allocation.

This no brainer approach suits me well.

Tom

Are bonds a good idea right now since interest may go up in Dec?

[sv2007]

I'd suggest reading Rich Cramer's Get Rich Carefully, only $10

http://www.barnesandnoble.com/p/jim-cramers-get-rich-carefully-james-cramer/1115700033/2671199201202?st=PLA&sid=BNB_DRS_Marketplace+Shopping+Paperbackshopus_00000000&2sid=Google_&sourceId=PLGoP23175&k_clickid=3x23175

It is interesting that his views almost match what I've done during 20+ years of stock market investment. Just put in the time and you should do fine; but you must put in the time to learn (otherwise, it is best to pay somebody else to do it for you --- takes the emotion out of it, i.e. prevents you from buying high and selling low).

The other book I recommend it Idiot's Guide to Getting Rich because reading that book (again) it felt almost like it retraced my steps to becoming financially pretty decent. But it took me 20 years to learn myself (again, I didn't read it until just a few months ago).

So, I've actually put into practice generally what these 2 books teaches without knowing (since I didn't read them until very recently). And it works.

[sv2007]

Are bonds a good idea right now since interest may go up in Dec?

Why do you think it is a good idea?

FYI: Bonds aren't generally a good idea when you think interest rate is going up.

[Singuy]

Why do you think it is a good idea?

FYI: Bonds aren't generally a good idea when you think interest rate is going up.

My question was aimed at Tom who thought it's a good idea to buy bonds right now..so he did.

[sv2007]

Investments tend not to operate on a calendar. Days, hours, and minutes are merely man's invention to measure time. I've always been amused at how everyone - including investment advisors - want to press a "re-set" button on January 1, when in fact it is only a day after December 31, and neither have any influence over how profitable an investment is or was.

Tax does have a time table; and realized gains/losses have to be accounted for. Being tax savvy can save you 100's of k's; e.g. realized a losing position to counter a profit (if it also makes financial sense of course, sorry to have to state it so explicitly, but many folks on this board doesn't seem to nit pick without using their own imagination).

[sv2007]

My question was aimed at Tom who thought it's a good idea to buy bonds right now..so he did.

His reason for buying isn't due to where he think the interest rate is going. It's just a rebalancing.

[corn18]

His reason for buying isn't due to where he think the interest rate is going. It's just a rebalancing.

Exactly. I don't ever time the market. I let my asset allocation (AA) determine what I buy.

[Singuy]

Exactly. I don't ever time the market. I let my asset allocation (AA) determine what I buy.

My bad, just read your post again and misunderstood what you were saying.

[TexasHusker]

Tax does have a time table; and realized gains/losses have to be accounted for. Being tax savvy can save you 100's of k's; e.g. realized a losing position to counter a profit (if it also makes financial sense of course, sorry to have to state it so explicitly, but many folks on this board doesn't seem to nit pick without using their own imagination).

Using tax consequences to guide your investment decisions is often ill-conceived, yet strangely is often the most common driver of of investment decisions in today's world. The IRA is often viewed as the holy grail because the monies you invest and earnings are tax DEFERRED. Big deal. That doesn't automatically place IRA instruments at the top of the heap in terms of wise investments. Far from it.

You can't get rich by saving a few dollars on your taxes. Make the best investment decisions you can. Hopefully you will owe bucket fulls of taxes because you made dumpster loads of profit.