Early Retirement Extreme Forums

good evening

Bro wrote: I started dollar cost average into VTSMX on monthly basis with purchases at the beginning of February and the beginning of this month. I realize index funds are not the most popular investment approach around here, but I figured I needed to take some sort of action and dollar cost averaging would mitigate regret from potential losses.

I think many people here (myself included) get a little hung up on finding the 'best' method of doing things. Indexing is fine for right now. You can always switch if and when you find something else more suitable. I think it's important to put at least part of your money into the market when you're learning about investing. It's the best way to learn about your own risk tolerance.

Welcome.

Don't be self conscious. You're doing great at your age, so clearly you have some financial street cred. VTSMX is a fine fund for both beginners and veterans.

I agree with Jenny. Though, you should at least look into appropriate asset allocation. You can still do this with index funds and dollar cost averaging.

I agree, don't let the perfect be the enemy of the good with investing. Just because a method is complicated doesn't mean it works better anyway, though sometimes it certainly does.

As someone who has about $10,000 in VTSMX I hope it turns out to be a good choice for both of us.

That's a lot of cash though. Do you have plans for it? I had a lot of cash in a savings account in my late 20s too. If you don't plan to buy a house or do something else with it you should consider investing it so that it can begin compounding. The more years you can give it to compound the better. In a 2% or so interest rate savings account it's not making you any money if you count inflation.

I agree with Chad, look into asset allocation. If you are interested in index funds I would recommend reading The Little Book on Common Sense Investing or Common Sense on Mutual Funds by John Bogle. Personally I decided to use a target date index fund for retirement since it adjusts the asset allocation automatically but I may rethink that when I get closer.

Bro wrote: I realize index funds are not the most popular investment approach around here, but I figured I needed to take some sort of action and dollar cost averaging would mitigate regret from potential losses.

I like them a lot, they're proven. I know I can't beat the market, so I might as well be the market.

@ Gilberto de Piento

I do not have any plans for the cash. I just could never pull the trigger on how to invest the money and it continuing accumulating over time. I fell victim to the status quo bias. The easiest thing to keep doing was what I was already doing.

dot_com_vet wrote:

Bro wrote: I realize index funds are not the most popular investment approach around here, but I figured I needed to take some sort of action and dollar cost averaging would mitigate regret from potential losses.

I like them a lot, they're proven. I know I can't beat the market, so I might as well be the market.

Same here. I think I might be able to beat the market however I'm not sure I would. I'd also be less diversified. To me stock picking simply isn't worth the effort.

I think AA is more important for your portfolio anyway and if you want to get better returns investing in different asset classes makes more sense. I probably though won't do much of this either. Safe simple stock indexes to me are the best bet.

I'm here for the Bro Quest?

You're doing fantastic, I'd just get some diversification going... Unless you think some kind of market crash is coming, holding USD for < 1% is most likely a losing proposition... I do permanent portfolio and find the daily volatility to be better than something more stock heavy.

Are you going to stay on until you qualify for a pension at 38?

Earning less than 1% on your money is a very risky proposition indeed...

@JohnnyH

I am not sure about staying on for the pension. I would have to hang around until 42. Time spent at the service academies does not count for your accumulated total time of service.

Bro Quest Check-In

I turned 30 a short time ago. I still work in the same capacity, and I am single. I am living in the EU right now, but will be headed somewhere else in late-2017. As of now, I do not now where.

Right now, my NW is approx. $537k, with some Euros sitting in my bank account here. About $172k of that is in retirement accounts with about $105k in the TSP G fund. I was invested for a short while after my last post, but then got out again, so I am sitting on all cash once again. I am thinking of maybe buying some real estate at my next stop, but do not know yet.

My expenses now are dominated by my rent. When living outside the lower-48 US states, the incentive is to spend up to your capped housing allowance as you only receive the exact price of your rent deposited as part of the pay on a monthly basis. Does not make much sense, but it is what it is. I need to get this journal going.