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Posted: 1/14/2015 2:20:19 PM EDT
suppose i have a chunk of cash, say $100K. I want to put it in the S&P 500. How would you go about buying positions to track the SP500?
Link Posted: 1/14/2015 7:20:42 PM EDT
[#1]
I'd go with a low expense ratio ETF or mutual fund that tracks the S&P 500.  With a large sum of money, you may consider dollar cost averaging (investing a certain amount of money over a series of time intervals e.g., $10k per month over 10 months), or you could just make a single purchase.  Dollar cost averaging could help you achieve a lower overall cost basis (if the market declines), but could also result in a higher overall cost basis if the market advances.  The general concept is that it would reduce your vulnerability to short term market swings by averaging out your purchase prices over a longer time interval.  It seems to be one of those decisions that everyone has their own view of, so you may want to research a bit and think about it.

These days, you can find commission free ETFs and no load mutual funds which track the S&P 500, so that's a way to keep expenses down.  Vanguard is a popular option for index investing and TD Ameritrade has about 100 commission free ETFs available as well.

The S&P 500 has been increasing pretty steadily over the past several years and its valuation is near the upper end of what some consider to be a good value i.e., many people think that a market correction is overdue or will be occurring soon.  Of course, no one knows for sure and trying to time an entry point could prove futile, or could result in a good bargain.  It's ultimately a personal decision based on what you anticipate.  


I'm no expert and would encourage you to do some research before making a decision.
Link Posted: 1/14/2015 11:01:04 PM EDT
[#2]
Very good advice by basselope.

Countless studies say trying to time the market doesn't work.


If you want sp500 I would look into VFIAX. It has a 10k minimum and the expense ratio is a low 0.05%.

I would be a bit nervous about dropping all 100k at once but then again it might work in your favor.

Something like buying 10k a month until you have 100k worth might be a good strategy. If the market is going down your later purchases buy you more shares and reduce your average cost. If the market is trending up you miss out on gains on the money that is not invested but you are not losing any principal.
Link Posted: 1/15/2015 9:34:14 AM EDT
[#3]
I to say look at vanguard.

they have 3 options

etf commission free  VOO
admiral mutual fund over 10k  VFIAX
investor mutual fund over 3k  VFINX

the expenses drop from .17% to .05% once you get to 10k and switch to admiral shares

I would spread the investment over the course of a year in monthly installments.... you never know what  will happen over the next 12 mo

the only reason I chose mutual fund vs etf for this fund in particular is automatic investment of dividends in partial unit of shares. I prefer this on investments I view as long term. so if you have money for 5.534 shares in dividends you get 5.534 shares not 5 shares and $20 left in a settlement account
Link Posted: 1/15/2015 9:54:03 PM EDT
[#4]
If you are buy and hold, just buy and don't stress about spreading out the purchase. In the long run, the sooner you buy the higher your gains. Could you buy high and miss a year's worth of gains? Maybe. Or you could push the purchases out and miss a year's worth of gains. In the long run it won't matter when you have 10+ years worth of gains.

I totally agree Vanguard is the way to go.
Link Posted: 1/16/2015 8:11:43 AM EDT
[#5]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
...
These days, you can find commission free ETFs and no load mutual funds which track the S&P 500, so that's a way to keep expenses down.  Vanguard is a popular option for index investing and TD Ameritrade has about 100 commission free ETFs available as well.

The S&P 500 has been increasing pretty steadily over the past several years and its valuation is near the upper end of what some consider to be a good value i.e., many people think that a market correction is overdue or will be occurring soon.  Of course, no one knows for sure and trying to time an entry point could prove futile, or could result in a good bargain.  It's ultimately a personal decision based on what you anticipate.  

I'm no expert and would encourage you to do some research before making a decision.
View Quote


yeah, vanguard has a very low cost fund that is basically the same as the S&P, probably called the vanguard 500 or whatever.  

Do you have a Roth IRA?  If not, invest your money in that manner as much as legally allowed for the various tax benefits, unless you want to cash out before retirement age.

in the opinion of may the markets are in a big bubble.   Buying now might be like buying a house in 2007.  Looking at a simple chart of the markets since '08 looks alot like the first half of this:


The argument is that the fed's quantatative easing goes to the big banks who borrow the funny money at basically 0% and buy stocks w/ it & profit & that they will do this till the all agree not to and they exit leaving the aveage man & pension funds etc holding the bag when it crashes back down.  Another argument for the bubble are the new records in price to earning ratios.  When this figure gets too high in history, the markets have collapseed shortly thereafter.


What those who see a bubble dont' agree on is what happens from here?  An inflatioary or deflationary environment?  In deflations, bonds & cash are best usually.  In inflation stocks are usually better than bonds.  remember that in deflation, cash buys more today than it did yesterday.  Bonds, gov, are in a manner of speaking cash equivalents, plust they have a rate of return so in a deflationary collapse where the government  does not collapse or default, bonds are the ultimate.   It is possible that the fex & other central banks can just keep goosing the economy w/ QE and it will drive the market higher.  If this occurs as now you can gain in wealth by being in teh market.  If this causes super inflation, the markets may go up x10 in nominal terms but your actual wealth, purhcashing power, would be about the same.
Link Posted: 1/16/2015 8:19:01 PM EDT
[#6]
buy shares in an S&P500 index fund. Such as one of Vanguard's due to their remarkably low cost such as VFINX.
Link Posted: 1/16/2015 9:36:00 PM EDT
[#7]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
buy shares in an S&P500 index fund. Such as one of Vanguard's due to their remarkably low cost such as VFINX.
View Quote


Yes, for an index fund, they way you get ahead iover the long term is to have lowerfees.
Link Posted: 1/16/2015 11:41:25 PM EDT
[#8]
How's this for strategy.?

put $10,000 at end of each quarter 3/31, 6/31, 9/31, 12/31.  Also have cash on hand for every 5% drop from its high, put in another $10,000. so it reached a high of 2093, then entry points at 1988, 1884, 1779, etc...
Link Posted: 1/17/2015 10:13:24 AM EDT
[#9]
What if you don't see your 5% drops and five years from now you still are sitting on 50k in cash and you missed out on 30k in gains?


I am not suggesting that is the way the market is trending I am just saying it is one possibility that your strategy doesn't seem to address.
Link Posted: 1/17/2015 11:36:36 AM EDT
[#10]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
What if you don't see your 5% drops and five years from now you still are sitting on 50k in cash and you missed out on 30k in gains?


I am not suggesting that is the way the market is trending I am just saying it is one possibility that your strategy doesn't seem to address.
View Quote


i would also be putting down 10,000 at the end of each quarter, not just waiting for the drops
Link Posted: 1/23/2015 4:43:18 AM EDT
[#11]
Tag, interesting
Link Posted: 1/31/2015 4:22:24 PM EDT
[#12]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
How's this for strategy.?

put $10,000 at end of each quarter 3/31, 6/31, 9/31, 12/31.  Also have cash on hand for every 5% drop from its high, put in another $10,000. so it reached a high of 2093, then entry points at 1988, 1884, 1779, etc...
View Quote

i would simply close your eyes and use a time-based interval, rather than trying to "pick bottoms".  

since this is after-tax money you are investing, i would move the 12/31 contribution to 1/1.  
this approach can help you avoid a small capital gains hit on money which really hasn't been invested that long.

so
1/1, 3/31, 6/31, 9/31.

ar-jedi

Link Posted: 1/31/2015 4:27:17 PM EDT
[#13]
ticker symbol-  spy

that's all you need
Link Posted: 1/31/2015 6:58:56 PM EDT
[#14]
I like ETFs more than mutual funds, but they're both going to perform the same. VOO, SPY, IVV

I know you can buy VOO commission free at vanguard and IVV free at fidelity.
Link Posted: 1/31/2015 10:13:45 PM EDT
[#15]
Have a look here
https://www.wealthfront.com/

IM me if you want a code to get another 5k w/o their tiny mgt fee.
Link Posted: 2/1/2015 12:54:36 AM EDT
[#16]


Discussion ForumsJump to Quoted PostQuote History
Quoted:



I to say look at vanguard.





they have 3 options





etf commission free  VOO


admiral mutual fund over 10k  VFIAX


investor mutual fund over 3k  VFINX





the expenses drop from .17% to .05% once you get to 10k and switch to admiral shares





I would spread the investment over the course of a year in monthly installments.... you never know what  will happen over the next 12 mo





the only reason I chose mutual fund vs etf for this fund in particular is automatic investment of dividends in partial unit of shares. I prefer this on investments I view as long term. so if you have money for 5.534 shares in dividends you get 5.534 shares not 5 shares and $20 left in a settlement account


View Quote
Good thoughts. However, VOO (Vanguard's 500 ETF) is also 0.05% expenses, which is the same as Admiral. Also, an S&P 500 ETF can offer some tax advantages over the same company's S&P Mutual fund, with regards to the number of taxable events. Here are some of the details:

 













and














Never underestimate the corrosive effects of taxes in a taxable account. With a mutual fund, the fund manager may have to buy and sell stocks to maintain the proper balance. This can create a taxable event for a fund holder, even if they themselves haven't sold anything.







Otherwise, I agree with the advice others have given about investing on a regular interval, no matter what the market is doing.

 
Link Posted: 3/21/2015 7:37:03 AM EDT
[#17]
Time is your friend...put the money to work now....personally i would go low fee index fund all of it right now and forget about it
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