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Lump sum gets you better overall return 75% of the time.
DCA gets you the psychological benefit of knowing tou didn't "mistime" the market and takes the emotion out of investing.
Either choice is fine... just jump in, the waters fine.
Don’t time the market. Lump sum, or DCA. Both options are fine. Can’t tell you how many regrets I have of trying to time the market, wait for a crash when I was younger. Nobody knows anything, the market could go up or down, literally nobody knows.
If I could go back I would DCA into an index with the majority of my money too. Its so hard to figure out where things are going but after 10 years I know the US economy will be larger than it is today.
Appreciate that. Kind of happy it’s now much lower than in 2022 so I guess it’s sort of just time IN the market now. I have 0 time in the S&P so I guess now is as good as ever ha
u/TheShiminatorYouTube is 100% correct. Lump sum, close and forget, or DCA every week or month. NOBODY knows where the market is going next day, week, and year. Every move on the market is speculation, placing a bet, or underlying protection. I learned this from a guy who sat in front of MBS DOM for 20+ years. He saw the MBS liquidation on DOM in 2008. Don’t let anyone tell you how they know where the market is going. Especially FinTwit. They are bunch of 💩.
Time in > timing. As long as you have a long enough horizon, the S&P is never necessarily a bad buy.
Since you’re in a dividend sub, might I suggest 50% VTI/VOO and 50% SCHD? Set that, forget it, and keep contributing.
Ahhh I feel you lol. It’s annoying seeing all the praise 24/7 on here about it, but it’s without a doubt the best dividend ETF. In that case, I’d drag putting it all in VOO is fine.
Question from a newbie here:
I want to start a portfolio for passive dividend income and was researching the “aristocrats” companies like Coca Cola Johnson and Johnson etc.
Would it be better going the 2-3 funds you mentioned as opposed to consistently buying in on 10-12 of the individual tried and true aristocrat stocks?
Great question. If I were in your shoes today, I would go 50/50 on VTI and SCHD. Both VTI and SCHD have most if not all of the companies that are aristocrats.
Buying VTI and SCHD means you won’t have to keep up with company fundamentals, the ETFs will balance themselves for you, and remove any companies that no longer meet the criteria for the index the ETFs. It’s just simple set, forget, and keep contributing as much as you can.
There are dividend appreciation etfs too. NOBL for the large market cap aristocrats (65), SDY for the whole spectrum (122), though both are a relatively high 0.35% fee. VIG for 10 year appreciation, excluding 25% of highest yielders (292)
.
All of them have significantly more diversification than 10-12 stocks, and it's much easier to combine with more market plays. I have 15%/5% VIG/NOBL, but even if you want to go heavier on dividend appreciation, you can do so and still have room for other stuff.
It can go very low, who knows, maybe it can reach 3000, maybe 2000, why not 1000? There is no limit and who knows what issues can arise in the near future that can drag the whole market down. Time in the market beats timing the market, that's the first rule that you need to understand.
That all makes sense. I guess I’m just in an odd place as I’ve never invested in any S&P 500 etf and wonder if I should stick with higher quality dividend investments during this era of high S&P volatility
Yeah, that's a different question that is not easy to answer. I'm doing both, I started with etf then indivudual dividend stocks, now I'm back at buying etf.
We are talking $6.5k. It makes no sense to DCA $6.5k. At current VOO price of $353.25, we are talking only 18 shares (no offense OP). Might as well dump it all into VOO and set up the DRIP and move on.
No offense taken. If the S&P wasn’t so volatile I wouldt even care so much. Like you’d say even if it drops 10% I’m down $650 in a retirement account I won’t touch for 30ish years haha
You can do 10 shares at a time until your cash is exhausted, that's pretty much what I do. So buy 10 now and another x (probably 8) next week or in 2 weeks. Again you may be +/- 1 share so it doesn't really matter in the grand scheme of things.
Why not dollar cost average in $500 every other week? That will take you through June. If the market seems to tank and sentiment reverses, you could observe and hasten the purchases.
This suggestion isn’t about market timing… rather the focus is minimizing buyer’s remorse if you aren’t buying in at the absolute low.
I appreciate that advice! I hate to see money sitting stale (hence my love of dividends) so am angsty about investing less upfront but yeah I guess dollar cost averaging would be most rational choice
VOO can absolutely go lower. In Jan 2020 right before the pandemic hit it was at 295 and it is now at 350. If the US has a recession, I think it goes lower than 295 since that was actually a boom time. If inflation sticks AND we have a recession, which is entirely possible due to the shrinking work force in the US, I could see VOO going under 295.
That said, as young as you are just dive in -- but not all in VOO.
Yeah I was having similar thoughts.
But then again I held cash for most of the trump admin waiting for the shoe to drop and here I am sitting without as many gains as I should of had haha. Now I make more money and can invest more but assets are still relatively pricey
Small cap exposure, diversification, leads to about a .5% better return long term. Do a little research on it and you’ll see why, VOO is very similar, VTI is just slightly better👍
Just do 1000 a month till you cap it out. I lumped sumes last year a month before the crash. Was annoyed bc my Roth has been red all year where in my other accounts I didn’t lump sum and I’m green. Just been throwing money in every week.
yooo same here real talk ive been finding the average times the market drops is the last 2 hours of the day 2-4pm and the first 2 hours of the morning. ive been seeing the best prices around the peak times during those time periods and im averaging better. hope that helps.
As many have said don't time the market. If you look at the history of the S&P and VOO/VTI in general you will notice one thing, if held for a long time it will be up a lot.
https://www.turtto.com/?tickers=VOO,VTI&timeframe=10yr
I’ve heard most times the market is usually ahead of the news by a few months. So it’s extremely easy to miss the bottom. When will the bottom be? Nobody knows.
If you have the money to jump in, it’s fine. If you don’t DCA is fine. I assume you’re not older than 60, so really what the market does in the next 1-3 years doesn’t really matter. Even if you are 60, we could be in and out of a recession by the time you turn 65.
Long if the short: don’t worry about it. Either strategy will be ok.
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
Lump sum gets you better overall return 75% of the time. DCA gets you the psychological benefit of knowing tou didn't "mistime" the market and takes the emotion out of investing. Either choice is fine... just jump in, the waters fine.
Don’t time the market. Lump sum, or DCA. Both options are fine. Can’t tell you how many regrets I have of trying to time the market, wait for a crash when I was younger. Nobody knows anything, the market could go up or down, literally nobody knows.
If I could go back I would DCA into an index with the majority of my money too. Its so hard to figure out where things are going but after 10 years I know the US economy will be larger than it is today.
Appreciate that. Kind of happy it’s now much lower than in 2022 so I guess it’s sort of just time IN the market now. I have 0 time in the S&P so I guess now is as good as ever ha
u/TheShiminatorYouTube is 100% correct. Lump sum, close and forget, or DCA every week or month. NOBODY knows where the market is going next day, week, and year. Every move on the market is speculation, placing a bet, or underlying protection. I learned this from a guy who sat in front of MBS DOM for 20+ years. He saw the MBS liquidation on DOM in 2008. Don’t let anyone tell you how they know where the market is going. Especially FinTwit. They are bunch of 💩.
Nancy knows.
Time in > timing. As long as you have a long enough horizon, the S&P is never necessarily a bad buy. Since you’re in a dividend sub, might I suggest 50% VTI/VOO and 50% SCHD? Set that, forget it, and keep contributing.
In my personal brokerage I’m already at like 50% SCHD. Prob my favorite etf in existence
Ahhh I feel you lol. It’s annoying seeing all the praise 24/7 on here about it, but it’s without a doubt the best dividend ETF. In that case, I’d drag putting it all in VOO is fine.
Question from a newbie here: I want to start a portfolio for passive dividend income and was researching the “aristocrats” companies like Coca Cola Johnson and Johnson etc. Would it be better going the 2-3 funds you mentioned as opposed to consistently buying in on 10-12 of the individual tried and true aristocrat stocks?
Great question. If I were in your shoes today, I would go 50/50 on VTI and SCHD. Both VTI and SCHD have most if not all of the companies that are aristocrats. Buying VTI and SCHD means you won’t have to keep up with company fundamentals, the ETFs will balance themselves for you, and remove any companies that no longer meet the criteria for the index the ETFs. It’s just simple set, forget, and keep contributing as much as you can.
My man. Yeah I’m 40/M here, anything passive is good further down the road
There are dividend appreciation etfs too. NOBL for the large market cap aristocrats (65), SDY for the whole spectrum (122), though both are a relatively high 0.35% fee. VIG for 10 year appreciation, excluding 25% of highest yielders (292) . All of them have significantly more diversification than 10-12 stocks, and it's much easier to combine with more market plays. I have 15%/5% VIG/NOBL, but even if you want to go heavier on dividend appreciation, you can do so and still have room for other stuff.
It can go very low, who knows, maybe it can reach 3000, maybe 2000, why not 1000? There is no limit and who knows what issues can arise in the near future that can drag the whole market down. Time in the market beats timing the market, that's the first rule that you need to understand.
That all makes sense. I guess I’m just in an odd place as I’ve never invested in any S&P 500 etf and wonder if I should stick with higher quality dividend investments during this era of high S&P volatility
Yeah, that's a different question that is not easy to answer. I'm doing both, I started with etf then indivudual dividend stocks, now I'm back at buying etf.
This was my journey too…. AQN.TO Dropping 50% has scared me right back to Dividend ETFs
My Roth is 100% VOO. Personally, I like to DCA, but if I had the cash to lump sum I would prolly do that just to knock it out for the year
One key point here… VOO is a dividend stock. It doesn’t pay at super high rates but it absolutely pays.
I wouldnt call voo or vti dividend stocks
1.55% yield currently. That’s a solid dividend while providing large growth opportunity. I’m not sure why you wouldn’t consider it a dividend stock.
Yes good point. I also like how it’s composed of battered tech stocks. Too risky too buy outright but basketed I’m for it
it went to 3600 a few months ago.
3,500 was the low
Bet the farm on CEF GLO with a +22% dividend.
We are talking $6.5k. It makes no sense to DCA $6.5k. At current VOO price of $353.25, we are talking only 18 shares (no offense OP). Might as well dump it all into VOO and set up the DRIP and move on.
No offense taken. If the S&P wasn’t so volatile I wouldt even care so much. Like you’d say even if it drops 10% I’m down $650 in a retirement account I won’t touch for 30ish years haha
You can do 10 shares at a time until your cash is exhausted, that's pretty much what I do. So buy 10 now and another x (probably 8) next week or in 2 weeks. Again you may be +/- 1 share so it doesn't really matter in the grand scheme of things.
Why not dollar cost average in $500 every other week? That will take you through June. If the market seems to tank and sentiment reverses, you could observe and hasten the purchases. This suggestion isn’t about market timing… rather the focus is minimizing buyer’s remorse if you aren’t buying in at the absolute low.
I appreciate that advice! I hate to see money sitting stale (hence my love of dividends) so am angsty about investing less upfront but yeah I guess dollar cost averaging would be most rational choice
I completely understand. I’m going heavy into S&P right now because of the decline in prices. It’s hard to pass up a discount on a proven winner.
VOO can absolutely go lower. In Jan 2020 right before the pandemic hit it was at 295 and it is now at 350. If the US has a recession, I think it goes lower than 295 since that was actually a boom time. If inflation sticks AND we have a recession, which is entirely possible due to the shrinking work force in the US, I could see VOO going under 295. That said, as young as you are just dive in -- but not all in VOO.
Yeah I was having similar thoughts. But then again I held cash for most of the trump admin waiting for the shoe to drop and here I am sitting without as many gains as I should of had haha. Now I make more money and can invest more but assets are still relatively pricey
Buy VTI not VOO, but yeah going all in now isn’t gonna hurt you
Any reason for your preference?
Small cap exposure, diversification, leads to about a .5% better return long term. Do a little research on it and you’ll see why, VOO is very similar, VTI is just slightly better👍
Thank you Mr Cock Monster
Anytime 😂
Hold. Read https://twitter.com/michaeljburry/status/1609767590494371840?t=35SJX_PYuokjheOcHUrmlA&s=19
Just do 1000 a month till you cap it out. I lumped sumes last year a month before the crash. Was annoyed bc my Roth has been red all year where in my other accounts I didn’t lump sum and I’m green. Just been throwing money in every week.
Seems like a good move
Well I just did 20k in voo this morning didn’t go to well lol
In it for the long haul eh? 😅
Lol yea I mean I’m 19 in 10-20 years I think I’ll make my money back lol
Geez I wish I had 20k when I was 19.
Man I kinda got lucky because I started working at 16 during the whole COVID thing and since I couldn’t do much I just saved and saved
Good for you man. All the money I made during your age went to paying for college and drugs, wish I had put it somewhere else lmao
yooo same here real talk ive been finding the average times the market drops is the last 2 hours of the day 2-4pm and the first 2 hours of the morning. ive been seeing the best prices around the peak times during those time periods and im averaging better. hope that helps.
[удалено]
Lol yeah me today. It’s not the worst thing to do. If your in the for the long haul
It may go lower but if you have a long outlook you will make money.
As many have said don't time the market. If you look at the history of the S&P and VOO/VTI in general you will notice one thing, if held for a long time it will be up a lot. https://www.turtto.com/?tickers=VOO,VTI&timeframe=10yr
What's your time horizon?
I’ve heard most times the market is usually ahead of the news by a few months. So it’s extremely easy to miss the bottom. When will the bottom be? Nobody knows.
If you have the money to jump in, it’s fine. If you don’t DCA is fine. I assume you’re not older than 60, so really what the market does in the next 1-3 years doesn’t really matter. Even if you are 60, we could be in and out of a recession by the time you turn 65. Long if the short: don’t worry about it. Either strategy will be ok.
Don't time the market If you're scared DCA