The tax consequence is that if you wait until January of 2011 to invest, you won't have the option to sell as a long-term capital gain in 2011. However, this is not a huge point in practice:
- If the investment is at a loss, you would rather it be short-term (if you care at all). You can sell in late 2011 as a short-term loss in either case.
- If the investment is at a gain, you would rather it be long-term. However, you can just hold onto it into 2012, since you normally would rather defer gains anyway.
- The exception would be if your marginal tax rate would be higher in 2012 than 2011, which could occur because of your income going up, or tax code changes. This might cause you to prefer to sell in 2011, if you were planning to sell soon anyway.
If your income this year was very low, but will go up in 2011, you might want to convert some or all of it into a roth ira this year. This would let you pay the tax on it at your low tax rate for this year, rather than at the likely higher rate when you retire.
Investment return consequences
An investment consequence is the fact that your money is sitting there, earning a lower expected rate of return than it could be. Not knowing your situation, I can't say how aggressive your holdings will be. Taking a fairly aggressive portfolio, 9% expected yearly return, and not investing for a month, you lose about .75% on average. Not huge, but something to consider. Remember that any decision you make here isn't permanent. If your previous allocation in the 401(k) was 100% in stock funds, you could put it in something like VTI, Vanguard's total US stock market ETF.
- Since the money was previously invested, dollar-cost averaging doesn't apply here.