FREE NEWSLETTER
In a prior post I explained that we were in the process of doing account transfers into Fidelity. As good fortune would have it, nearly all of our money was sitting in cash when Liberation Day caused the market to tank.
My quandary was how to get back into the market. I asked what would you do; dollar cost average (DCA), or take the plunge. Replies were mixed.
I bet on import taxes creating havoc for the balance of the year, and chose to DCA. I bet on the wrong horse, as the market has broken one record after another. We have been missing out on some action since mid April.
Our current allocation is 24% equities, 33% bonds, 43% cash. I still feel like there’s danger hiding around every corner, and if disaster strikes, I’ll jump back in like my cat Sophie pouncing on a spotted lantern fly; she is a ferocious predator😾, but I digress. Just to be clear, my target equity allocation will be between 50 and 60%.
The consolation prize has been 4% interest earned on the cash, though the rates may be changing soon.
Those of you who implored me to jump back in may now smugly say, “I told you so you big dummy”.
I’m not a market timer so I’m all in all of the time
LH, yep, so am I.
But I can see that dollar cost averaging can help with the idea of “regret minimisation”. Going all in requires a certain leap of faith, and if someone is finding that a little too confronting, then DCA is a way to more gently go about things.
Comments:
I have done several transfers and always used in-kind., which means never in cash. Our CD/MM/CASH has been under 0.5% for decades, unless I’m out at 99+% in Schwab MM.
I have been using timing pretty well over the years because I decided many years ago to search it. It took me “only” 10 years to master it.
I’m right about 60%. When I’m wrong, I’m out for about up to one week. When I’m right, I’m out for several weeks to months.
Schwab has 99+% of all the money we have, including all brokers, banks, and credit unions.
See
2025: https://ibb.co/Xr7SJXq4
2022: https://ibb.co/xKxHBszK
2020: https://ibb.co/NvgmZgG
Performance since retirement in 2018: https://ibb.co/zT6QGzSs
If you never try other methods, you will never find them.
Dan, Don’t be so hard on yourself. We all make mistakes. Most of us make far more crucial errors. People love to give advice, But the more people you ask for advice the more likely you will end up completely confused because you will get conflicting and opposing answers. Then, in addition to your original conundrum, you will also have the problem of which advice to take.
Find a few trusted sources or even one trusted friend who only wants the best for you.