Hi Bogleheads,
I am in my early 30s and have a very nice position in both cash (mostly bonds) and equities, but feel I am overweight in cash and would like advice on how/when to transition into more VTI. Due to a combination of luck and frugality I currently have roughly 600,000 in VTI and Berkshire, and about 1M in bonds earning 3-4%. My after tax salary is about 80,000 per year, and while I try to not touch my stocks, I use some of the interest on the bond position, between 20-30k per year depending. Yearly spend hovers between 80-110k. I feel the cash/bond side is quite overweight but I have been hesitant to put anything in the market given current shiller PE and Buffett indicators. I worry that I'll put in a large sum and then a 2001 or 2008 event will happen that we might one day call the "AI" bubble. I am considering three options and curious to know which people recommend more, or if you have an alternate reccomendation. VTI is my index of choice and my long term goal is to create a personal endowment that can supplement my income and grow until I retire, maybe a percent or two per year until retirement.
Would you:
1. DCA 100k every year for the next 5 years…something like 25k per quarter.
2. Put in 500k now
3. Wait until a correction and then put in 500k
Because I use some of the interest on the cash with higher interest rates right now, I’m effectively reducing my "extra" bond interest salary with every dollar I move into stocks, but I feel like I’ve been missing out on returns the last several years with so much cash on hand. I’d like to keep several hundred around to give me some options incase I need to put a down payment on a house in the next 3-5 years.
I realize that the answer to this question may largely depend on whether you think the market is overvalued or not, so I welcome any speculation with sound reasoning for why you think that may or may not be the case.
These charts give me pause, but I've also read that in election years, markets have historically outperformed regardless of the outcome of the election
Buffett Indicator: https://www.imagebam.com/view/MEV8KIG
Shiller: https://www.multpl.com/shiller-pe
Thanks for your thoughts.
I am in my early 30s and have a very nice position in both cash (mostly bonds) and equities, but feel I am overweight in cash and would like advice on how/when to transition into more VTI. Due to a combination of luck and frugality I currently have roughly 600,000 in VTI and Berkshire, and about 1M in bonds earning 3-4%. My after tax salary is about 80,000 per year, and while I try to not touch my stocks, I use some of the interest on the bond position, between 20-30k per year depending. Yearly spend hovers between 80-110k. I feel the cash/bond side is quite overweight but I have been hesitant to put anything in the market given current shiller PE and Buffett indicators. I worry that I'll put in a large sum and then a 2001 or 2008 event will happen that we might one day call the "AI" bubble. I am considering three options and curious to know which people recommend more, or if you have an alternate reccomendation. VTI is my index of choice and my long term goal is to create a personal endowment that can supplement my income and grow until I retire, maybe a percent or two per year until retirement.
Would you:
1. DCA 100k every year for the next 5 years…something like 25k per quarter.
2. Put in 500k now
3. Wait until a correction and then put in 500k
Because I use some of the interest on the cash with higher interest rates right now, I’m effectively reducing my "extra" bond interest salary with every dollar I move into stocks, but I feel like I’ve been missing out on returns the last several years with so much cash on hand. I’d like to keep several hundred around to give me some options incase I need to put a down payment on a house in the next 3-5 years.
I realize that the answer to this question may largely depend on whether you think the market is overvalued or not, so I welcome any speculation with sound reasoning for why you think that may or may not be the case.
These charts give me pause, but I've also read that in election years, markets have historically outperformed regardless of the outcome of the election
Buffett Indicator: https://www.imagebam.com/view/MEV8KIG
Shiller: https://www.multpl.com/shiller-pe
Thanks for your thoughts.
Statistics: Posted by bond93 — Sun Aug 11, 2024 11:40 pm — Replies 3 — Views 633