Help me evaluate this investment strategy.
March 23, 2012 2:25 PM Subscribe
I've been happily making regular investments, but I suddenly have a lot more money to invest. How should my strategy change, it at all?
posted by theexpgen to work & money (11 answers total) 5 users marked this as a favorite
For the past few years, I've been purchasing a mix of Vanguard ETFs on a near monthly basis. I invest roughly the same dollar amount each month and upsize and downsize my individual buys just enough so that the overall mix of assets I hold accords with my target allocation at the end of each investment cycle.
This plan was working just fine, at least in my opinion, until I got a big bonus. Now I have a lot more money to invest, and I can't decide if it makes sense to substantially increase the monthly buy. Prices now are at the high-end of what I've paid historically, so piling in now means my average per share costs will increase substantially. That said, it's not like the money is earning or could earn good risk adjusted returns elsewhere. Dividends are, of course, also a factor.
I suspect that since I'm investing for the long term and don't presume to know when the next market drop will occur, I should just get comfortable with bigger regular buys, which may skew numbers in the near term while not making much difference over the course of longer periods of time, but I'm hoping the hivemind can confirm or deny.
I'm aware that this is a good problem to have. Thank you in advance for your input.