Ask Rande 10,000+
- Slick
- JenL_2
- Rande
- CatBird
- CatBird
- PaulJoslin
- CatBird
- PaulJoslin
- Rande
- Rande
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» Slick - 13 k to Invest
Hi Rande:First...a brief history. As you may or may not recall, our 401 k, during the millennium turn , experienced a debacle, to wit, the infamous " day-trading scandal." The low life umscupulous dogs at Merrill Lynch, were executing the trade orders the next day !! Well , it didn't take long for the stock ( LFB) that normally experiences < 100k volume , to zoom up to over a million. Needless to say, it was a can't miss situation yinging and yanging with certain predictability. Obviously, some traders ( at Longview Fibre ) made thousands in a 2 week period , before they " froze " the account, which ended it , mercifully. For those who just sat there not trading ( like me ) seeing their balance ( in " equivalent" shares) decline was tumultuous. When the dust settled ( more than a year and a half later ) both parties agreed to right the wrong for us. In my case , it was worth 13 k.
My question to you Rande, is would you "Dollar Cost Average" back in , or because it was in a asset class of equities , just put it back all at once ? ( S&P this time...no specific stock risk for me with new money )
Slick
-- posted by Slick
» Rande - Re: 13 k to Invest
In response to message posted by Slick:Slick,
All's well that end's well. Not sure if the $13K makes you whole, but considering what the market has done over the last year and one half, it's probably better than it seems. So much time has passed that it should probably be treated as "new money." Whether you DCA or lump sum is a personal decision. My own preference is to focus on the overall asset allocation, whatever that might be, and get the portfolio in line sooner rather than later. For some, the "regret of too soon" or the "regret of too late" can be debilitating. Since it's impossible to time these things without a great deal of luck, DCA can help mitigate the remorse factor.
Congratulations and good luck.
-- posted by Rande
» CatBird - Re: 13 k to Invest
In response to message posted by Rande:How do you see adjusting your DCA timeframe based on the percent the market is down from its' high? The extremes would be when the market is down over 20%, use a short DCA time frame - say 4 months. When the market is up near its' highs, use a long time frame - say 24 months.
-- posted by CatBird
» PaulJoslin - small print
I asked this question over on the TA thread, but I don't want to tie up the TA thread with my own personal computer problems. How do I make the messages appear larger? I am running windows 95 on aol and that's all I know.-- posted by PaulJoslin
» PaulJoslin - Re: Re: small print
In response to message posted by CatBird:Thank you catbird, you are the second one to tell me that, but please forgive my ignorance, just where do I find this "view" option? I have looked everywhere I can think of.-- posted by PaulJoslin
» Rande - Re: Re: 13 k to Invest
In response to message posted by CatBird:
Cat,
Always a personal decision. I've stated a number of times that my own preference is to get the asset allocation in line sooner rather than later without regard to speculation over market outlook. For some, the regret of "too soon" or "too late" could be so upsetting that a DCA program could make sense. My own advice would be that once a DCA program is initiated it should be followed to its conclusion without variance. Yes, there is a temptation to accelerate the program on a significant dip. But what if a recent 10% or 20% dip is followed by yet another 10% or 20% dip? It happens, and if the remainder of the uninvested funds were lumped in on the first dip then the benefits of DCA are gone and the investor is left with the regret of too soon in any event. Personal choice, however, and for some the DCA approach at what they consider lofty levels with the idea of accelerating at a specific lower level, if reached (e.g., a preconceived plan that says so much of the remaining funds will be accelerated at such and such point in time based on percentage drop in market level, otherwise stick to DCA, etc.) might make sense so long as such a plan can be followed with discipline and without regard to emotion (fear/greed).
-- posted by Rande
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