[Ellen]

For my primary retirement account I use DCA, it is automated.

I have a Roth IRA that I’ve only fairly recently been maxing out.

Normally, I hold the money in an easily accessed account and dump the whole year’s contribution into the account all at once and buy VTSAX.

(It’s a weird way to do it, but I’m comfortable doing it that way.)

I know I shouldn’t try to time the market, but… I feel like it’s okay to go ahead and fund at least part of 2024’s contribution and buy now while the market is tanking?

Obviously, I don’t know the bottom, but it still seems worthwhile.

Your thoughts?

[张扬]

You should invest as soon as you have the funds. If you’re waiting to do so then that usually means your asset allocation is too aggressive for your risk tolerance, or you’re trying to time the market.

[Christopher]

The “tanking” today takes us all the way back to .. May 2024. 2 months ago.

This entire “dip” will be forgotten in 36 months or less.

Or it will expand to something much bigger, and this early stuff will be … forgotten in 36 months amid the tumultuous crash to come.

Either way, it’s not a useful way to time an investing decision unfortunately.

For a counter point – I maxed my ira in 2007, and in 2008.

I maxed my wife’s for 2008 and 2009 in spring 2009, which ended up being the bottom (entirely by luck – the irs deadline forced the issue).

Despite me having an entire extra _year_ of contributions, and ~2 _years_ of growth, her ira is about $16,000 ahead of mine because of fortuitous timing around one of the larger crashes in recent history.

If you’re hoping to game that kind of outsized performance, you’ll have to wait for things to be substantially more dire – think years of media moaning (GFC was about 2 years of only bad financial news, relentlessly), not a week or two.

[Sean]

Best thing to do is invest the money as soon as possible. In the absence of a Time Machine, now is the best option.

[Mark]

“I know I shouldnt try to time the market but”……………. see the phrase posted almost everyday.

buy early, buy often, always be buying. in 20 yrs, what ur attempting to do likely will make no difference.

rule of thumb.

invest as soon as u have the money.

[Jasmine]

As a general principle, I’d say max out your IRA as early as you can.
I max out my Traditional IRA in one lump sum in January (then backdoor it to a Roth IRA) because I want to give it the maximum amount of time in the market to grow.

[Vincent]

In the big-picture view of retirement planning, the year 2024 is a very short period.

Decades from now, when you’re enjoying this money, you’re unlikely to remember or care in which month you made the contribution.

The important part is that you’re making the contribution.

[Bill]

It doesn’t matter. It’s 7k. If you manage to market time and make an extra 10%, it’s $700.

Anyway, the year is half over so you may as well make your contribution now.

If you are lump sum investing, the winning strategy on average is to do that in January.

Otherwise, just automate it to transfer every payday and forget about it.

[Ashley]

I generally build up the next year’s contribution in a HYSA and dump it all at once on January 1st, so it’s not weird at all.

If I were in a position where I didn’t know whether or not I’d be eligible for a Roth IRA then I’d probably do it the way you are.

While I’m generally not a fan of trying to catch a falling knife, I would probably be considering throwing a chunk of it in today if I had the room.

[Tony]

If you have the money, then yes, I would lump sum it. But, I would have done that as soon as I had the money. Or preferably, January 1.

[Author]

Posts