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Getting Back into the Market Now

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AUTHOR: Alex Liu on 5/20/2025

Hypothetically, say you lost your nerve and pulled you money out of the market because you thought it was obvious the entire economy was ready to collapse due to incredibly high valuations for both stocks and real estate and finally implementing tariffs, only to witness the market quickly recover. How would you get back in?

I suppose this person (not me, of course, since I am a long term index investor) would be best served using a dollar cost average, but over how many months to get back in? I’m thinking 9 months… maybe?

Would you agree that at this point Lump summing it back in at this point is folly?

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Boomerst3
4 months ago

I was in this industry for a long time, and I saw clients get out when the market was down, and get back in when they felt comfortable, which usually meant after the market had rallied for a while. So, they got out low, and in high. The market cannot be timed. Set a comfortable asset allocation and ride it out

Martin McCue
4 months ago

If you were imprudent or impatient, or both, you may need to take your medicine. If you know you need to get back in, I’d suggest giving yourself a short timetable to do so, say three months, and not being greedy about when you reenter. The market usually has some dips and jumps in that kind of period, and you can look at performance of your target fund or ETF, or whatever else it is you want to get back into. Look for a dip that seems slightly larger than the normal ebb and flow, and then get back in. You will have taken your medicine, but not more than you really had to.

Dennis Riley
4 months ago

If you got out of the market because of incredibly high valuations on both stocks and real estate why would you get back in now? The valuations haven’t changed. Stand by your convictions and be happy with your 4.25%.

Jon Daley
4 months ago

If your friend lump sums right now, they will be about break even, depending on when they got out.

I had thought about getting out because it did seem obvious to me that the market was going down due to uncertainty, and in this case I would have timed it about right.

My son asked if I had gotten out the other day so we did the calculation to see how it works have worked out (I stayed in), and it would have saved me 7%, since I wouldn’t have timed it perfectly, but as long as you get back in before the market returns to the number that you got out at, you win.

I think the “never get out folks” don’t realize that you don’t have to time the market perfectly. But I would agree in general that you don’t usually know what the market is going to do (and I don’t know what is going to happen in the coming months if the tariffs “unpause”, etc.

normr60189
4 months ago
Reply to  Jon Daley

Some people take a portion of their portfolio to play with. Call it a “sand box”. They use that container to buy and sell (trade) and it satisfies their itch to beat the market without risking it all. Most of their investments are outside that box. Those investments are allowed to grow over time and are added to using a long term “buy and hold” strategy.

Last edited 4 months ago by normr60189
William Dorner
4 months ago
Reply to  Jon Daley

Timing is not for most of us. A note, if you missed just the top five trading days in the last year, the difference in overall up side would be 43%. This is why you stay in the market and ride it out, yes it is difficult but most times you would be better off not selling all you stocks and then buy them back. No one, and I repeat no one knows where the market is going. I say just pick a day, and when the market goes 5% below that, then get back in all at once. Otherwise on the first day of the next 3 months, buy in 1/3 each month. Better yet, never sell all stocks, be LONG term and keep it that way.

normr60189
4 months ago

Is it folly to lump sum back in at this point? For anyone who bailed I’d suggest revisiting the thinking that caused one to exit in the first place. I think allocation and personal goals are more important than the entry point. Why? Because “Time in the market beats timing the market”. 

What information prompted this fire sale? Set aside the politics and the “news”. Consider the actual economy, the likely impact of tariffs, the consequences of which remain to be felt, and market valuations. Has anything changed that influenced my thinking and if so, what was it? If it was the news or my friends, well, I hate to say it but there will be more negative news and bad opinions.

Whatever was present that stimulated this sale is still there.

This is again a learning experience and an opportunity to become a better investor.

If I bailed because of tariffs, then why do I today think that they will have no effect? These things take time to play out. 

Some today are lamenting the fact that they missed the most recent dip and accompanying buy opportunity. Their thinking was similar to those that bailed.

If I were to re-enter the market, I’d take this opportunity to review my previous allocation and consider what I didn’t like about it and how that allocation influenced my decision to sell.

Perhaps I was being too aggressive. If so, construct a portfolio that’s appropriate for my age and that won’t cost me sleep at night. 

The market is volatile and the next adjustment may be weeks, or months, or a year away. It is easy to construct a portfolio which may limit the damage under most declines. For example, a 50/50 portfolio will experience a decline if the markets fall 20%. But 20% of 50% equities is a 10% decline, which is what such a portfolio would experience. A 70/30 portfolio will experience a 14% decline because of the stock component. 

I suggest pick an acceptable allocation and then commit. Entry is one thing, but I think committing to hold is more important for the long term.  

Last edited 4 months ago by normr60189
B Carr
4 months ago

To the question: No, I wouldn’t agree.

If fear is the driver then DCA. Get it all done inside of 12 months, the sooner the better.

If simply licking wounds, and learning by experience, lump sum today.

Lump sum wins >60% of the time.

Last edited 4 months ago by B Carr
stelea99
4 months ago

There have been many discussion of this subject at Bogleheads, including in the Boglehead Wiki. Vanguard has a scholarly research report here:

https://corporate.vanguard.com/content/dam/corp/research/pdf/cost_averaging_invest_now_or_temporarily_hold_your_cash.pdf

I remember reading something, (couldn’t find it) that showed that over the long term, you could have made annual investments on the day of the highest equity price level of each year and have had good results.

The fact that you planned to make monthly buys on set days which were chosen in advance, and then couldn’t do it on a day the market went up demonstrates the challenge of manual DCA.

Randy Dobkin
4 months ago

No. Lump sum wins more often since the stock market’s long term trend is up. But if it were my whole portfolio, I might do half lump sum and half DCA.

Liam K
4 months ago

Isn’t trying to time the market what got you into this mess in the first place? Hypothetically of course. If you’re a long-term investor I’d just dump it all in right away, no use parceling it out of you aren’t gonna use it in the next 10 years, because (hopefully) market returns will make the difference in cost basis more or less irrelevant. Stretching it out by dollar cost averaging is going to require a 9 month (or whatever timeline) recurring commitment to invest at whatever level you’re getting in at that time. The lump sum is one and done, and you can think about more important things in the meantime.

DAN SMITH
4 months ago

Jeez I don’t even know you Alex, but it’s as if you are talking about me. I’ve been transitioning our various accounts into Fidelity, and just happened to be about 80% in a money market on 4/2. My decision was to DCA back in over 8 months. The first investment was perfectly timed. The second date was to have been last week, but the tariff capitulation sparked a recovery, so I refrained from investing. Now I’m waiting for a dip. 
Should I have just jumped back in with both feet when the market was down 20%? Kinda wished I had. I’d be up…. A lot. Seems I made the common market timer mistake of missing the bottom. 
I do at least get a consolation prize in that my cash is earning 4%, and I don’t think the volatility is gone, so I’ll just stick to my original strategy of being back in by the end of the year.

Randy Starks
4 months ago
Reply to  DAN SMITH

Like Norman stated above:  “I think allocation and personal goals are more important than the entry point. Why? Because “Time in the market beats timing the market”. 

Allocation is key, and re-allocation along the way keeps your portfolio(s) in check. Thus, pick your poison and stick with the allocation through ups and downs in the market. I always keep a “Margin of Safety” allocation to short-term bonds and a money market to reduce risk and for redeployment as I see necessary.

mytimetotravel
4 months ago
Reply to  DAN SMITH

But if the dip had not occurred, would you have made the second investment?

DAN SMITH
4 months ago
Reply to  mytimetotravel

Hey Kathy, the negatives were not from me. I thought your questions were reasonable and fit well into the conversation.

mytimetotravel
4 months ago
Reply to  DAN SMITH

Thanks Dan. There seem to be one or two people who down vote pretty much everything I post.

R Quinn
4 months ago
Reply to  mytimetotravel

I feel the same way when I post.

gb
4 months ago
Reply to  R Quinn

R Quinn, just a thought as I’ve also observed that on a lot of your replies and comments…I’m guessing that fact shouldn’t be a surprise to you, not sure how you come across in real life but on this site you often come across as confrontational and/or even rude for some reason. One simple modern suggestion that could get you a better response online (and potentially in real life also) would be to pass your reply through chatgpt or some other ai agent and ask it to make it sound a little nicer, more pleasant, or ironically…more “humane”?

R Quinn
4 months ago
Reply to  gb

I’d really like to hear more about that and an example or two as well. If you mean I challenge some comments and positions, you are right, but I never intend to be hostile and certainly not rude.

I do think everyone should be prepared to defend what they say if questioned, including me.

Here is my email if you decide to give me an example. Rdquinn3@gmail.com.

thanks

Jonathan Clements
Admin
4 months ago
Reply to  mytimetotravel

I’ve noticed the same thing, and it’s not just your comments. Over the years, I’ve detected a bias against women who express strong opinions.

Boomerst3
4 months ago

Just curious. How do you know someone is a woman if they don’t have their name listed? In this case, mytimetotravel could be male or female.

Jonathan Clements
Admin
4 months ago
Reply to  Boomerst3

Mytimetotravel has been writing for HD for a number of years, including bylined articles under her real name.

https://humbledollar.com/author/mytimetotravel/

Philip Stein
4 months ago

Perhaps if people were expected to post the reason for a negative vote, more of those with a bias against women would remain silent.

Personally, I’ve disagreed with a couple of posts Kathy has made in the past, but overall I find the majority of her comments to be spot on. I hope she continues to post her “strong opinions.”

mytimetotravel
4 months ago
Reply to  Philip Stein

Thanks, Philip, I plan to! I did ask the most recent down voters for an explanation, but it seems they prefer to remain in hiding. I do down vote on occasion, but I’m prepared to say why, if others haven’t done so already.

jan Ohara
4 months ago

Well, that is very disappointing to hear.

Olin
4 months ago

Is there a way to remove the down arrows? I think some of the dominant authors & posters unfairly get down arrows. In most cases, when I see a down arrow, I’ll give the person an up arrow.

One brokerage removed the ability to give a negative count to a response. It used to show who was doing that. Now you can only give a ‘like’ and says who you are.

Michael1
4 months ago
Reply to  Olin

I’ve wondered removing the down arrow capability as well.

Jonathan Clements
Admin
4 months ago
Reply to  Michael1

I’m reluctant to remove the ability to vote up and down on comments. If folks make foolish, nasty or overtly political comments, or they keep pounding away at the same viewpoint without learning anything from those who express reasonable disagreement, I think the community should have a way to show its disapproval.

Boomerst3
4 months ago

I vote down if i disagree without regards of their sex. Most of the time I don’t even look at the name of the person posting. My responses are based simply on whether I agree or not. They are not putting that other person down, just expressing a difference of opinion. No right or wrong

Jack Hannam
4 months ago

I say keep the arrows. It would be interesting if each down-voter would add a brief explanatory message, and the numbers of up- and down- votes were listed separately.

I notice the total numbers of votes and comments made about an article don’t always correlate with how interesting or useful I thought the article was.

Michael1
4 months ago

I can see that. In practice the down arrow seems more widely used than that, including not agreeing with the idea in a comment, not liking the way the comment was worded, or sadly even not liking the commenter. The down arrow seems to introduce more negativity than it polices. I suppose another option is no arrows at all.

jan Ohara
4 months ago
Reply to  Olin

Olin, are you saying that the up and down arrows cancel each other out? So if there were an equal number on both sides, the post would show zero arrows?

Jack Hannam
4 months ago
Reply to  jan Ohara

I think it would be more interesting to see the number of ups and downs listed separately, rather than having them cancel each other out.

R Quinn
4 months ago
Reply to  Jack Hannam

I agree with that. Both up and down.

Olin
4 months ago
Reply to  jan Ohara

Yes, that is what I notice.

mytimetotravel
4 months ago

Thanks, Jonathan. I didn’t think I was hallucinating.

DAN SMITH
4 months ago
Reply to  mytimetotravel

Kathy, did you mean if the market hadn’t rallied, would I have made the 2nd buy? Absolutely yes, I was ready to go on 5/12, the day the market spiked.

mytimetotravel
4 months ago
Reply to  DAN SMITH

No, I meant that it sounds like you were prepared to DCA at the valuation prior to the dip, and buying during the dip was a piece of unexpected good fortune. So, if you were originally expecting to buy in at the level the market is now at why not go ahead and do so. That’s a different situation than selling at the bottom.

DAN SMITH
4 months ago
Reply to  mytimetotravel

Greed maybe. Trying in vain to squeeze out every last cent, but I may have an itchy trigger finger. When I finished that last post I checked and found the market down .8% and made the 2nd buy. Lo and behold I’m already up almost a half %.

mytimetotravel
4 months ago

If I had done that, which I didn’t, I might wait for the next dip.

Nick Politakis
4 months ago

Yes, I agree 100%. I had an investment plan until the beginning of April, liberation day. I have not invested a penny since then and will not do so until I feel comfortable. I don’t know when that will be.

Last edited 4 months ago by Nick Politakis

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