New Money

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troll's picture
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Joined: 2004-11-29

With the charts climbing almost uninterrupted for so long, what are you all doing to invest new money that comes in. Other than VA's with guarantees. (no disrespect meant to anyone on that)

Indyone's picture
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Joined: 2005-05-31

VA's are fine, but you might also consider dollar cost averaging.  It's a simple strategy that hedges your bet on which way the market is headed...

troll's picture
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Joined: 2004-11-29

Indyone wrote:VA's are fine, but you might also consider dollar cost averaging.  It's a simple strategy that hedges your bet on which way the market is headed...
I've not changed my investment approach, but what I have changed is the way I am implementing it. I am generally investing about 60% of the new money that comes in, and then looking for opportunities to invest the rest. I figure if we get a correction, I have an opportunity to invest the rest and average down, if the markets keep going up, I am investing the rest with a bit of a cushion. What I try to avoid is the possibility of investing new money, finding myself down 7-8% quickly, and having to make 10% to get back to even.

troll's picture
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Joined: 2004-11-29

pratoman wrote:
Indyone wrote:VA's are fine, but you might also consider dollar cost averaging.  It's a simple strategy that hedges your bet on which way the market is headed...
I've not changed my investment approach, but what I have changed is the way I am implementing it. I am generally investing about 60% of the new money that comes in, and then looking for opportunities to invest the rest. I figure if we get a correction, I have an opportunity to invest the rest and average down, if the markets keep going up, I am investing the rest with a bit of a cushion. What I try to avoid is the possibility of investing new money, finding myself down 7-8% quickly, and having to make 10% to get back to even.

How well have you done at timing the market in the past? Just invest the money. Have you considered an annuity without a guarantee?

troll's picture
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Joined: 2004-11-29

Bobby Hull wrote:pratoman wrote:
Indyone wrote:VA's are fine, but you might also consider dollar cost averaging.  It's a simple strategy that hedges your bet on which way the market is headed...
I've not changed my investment approach, but what I have changed is the way I am implementing it. I am generally investing about 60% of the new money that comes in, and then looking for opportunities to invest the rest. I figure if we get a correction, I have an opportunity to invest the rest and average down, if the markets keep going up, I am investing the rest with a bit of a cushion. What I try to avoid is the possibility of investing new money, finding myself down 7-8% quickly, and having to make 10% to get back to even.

How well have you done at timing the market in the past? Just invest the money. Have you considered an annuity without a guarantee?

Not well at all. Thats why I am taking what I consider a hedged approach. As I said, if the market corrects in the next month, I've got more money to put in to leverage up, if it keeps going, I am investing the rest with a cushion. I am not trying to time the market, just avoid being in a position where I have to make 10% just to get back to even.

troll's picture
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Joined: 2004-11-29

pratoman wrote:Bobby Hull wrote:pratoman wrote:
Indyone wrote:VA's are fine, but you might also consider dollar cost averaging.  It's a simple strategy that hedges your bet on which way the market is headed...
I've not changed my investment approach, but what I have changed is the way I am implementing it. I am generally investing about 60% of the new money that comes in, and then looking for opportunities to invest the rest. I figure if we get a correction, I have an opportunity to invest the rest and average down, if the markets keep going up, I am investing the rest with a bit of a cushion. What I try to avoid is the possibility of investing new money, finding myself down 7-8% quickly, and having to make 10% to get back to even.

How well have you done at timing the market in the past? Just invest the money. Have you considered an annuity without a guarantee?

Not well at all. Thats why I am taking what I consider a hedged approach. As I said, if the market corrects in the next month, I've got more money to put in to leverage up, if it keeps going, I am investing the rest with a cushion. I am not trying to time the market, just avoid being in a position where I have to make 10% just to get back to even.

So...instead of timing the market, you're timing the market? Makes sense to me.

troll's picture
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Joined: 2004-11-29

Whatever, call it what you want.

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