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58 votes
Accepted

Short term parking of a large inheritance?

"Safe short term" and "pay almost nothing" go hand in hand. Anything that is safe for the short term will not pay much in interest/appreciation. If you don't know what to do, putting it in a savings ...
BrenBarn's user avatar
  • 24k
34 votes

Does dollar-cost averaging just means taking risk later?

The paper you are referring to is likely the Vanguard report Dollar-cost averaging just means taking risk later. The thrust of the paper is that lump sum investing outperforms dollar cost averaging ...
Magua's user avatar
  • 5,097
20 votes

Short term parking of a large inheritance?

I am sorry for your loss, this person blessed you greatly. For now I would put it in a savings account. I'd use a high yield account like EverBank or Personal Savings from Amex. There are others ...
Pete B.'s user avatar
  • 76.7k
16 votes
Accepted

Dollar cost averaging - Should I still do it if I have a large pile of cash now?

According to some research conducted by Vanguard: We conclude that if an investor expects such trends to continue, is satisfied with his or her target asset allocation, and is comfortable with the ...
quid's user avatar
  • 49k
12 votes
Accepted

Does dollar-cost averaging just means taking risk later?

The answer you link, and the Vanguard paper it references, implicitly define dollar-cost averaging (DCA) as an execution strategy where you acquire a large amount of cash all at once, and then decide ...
Phil Frost's user avatar
  • 3,131
9 votes

Does dollar-cost averaging just means taking risk later?

I agree with the other answers but I think the confusion comes from the phrase "lump sum" and can be explained much more simply: In a market that is on average increasing, you want to get your ...
TTT's user avatar
  • 47.2k
8 votes

Dollar cost averaging - Should I still do it if I have a large pile of cash now?

Dollar cost averaging performs better in an oscillating market. Lump sum investing performs better in an up trending market. So what's the market going to do going forward? No one knows so it's ...
Bob Baerker's user avatar
  • 76.6k
7 votes
Accepted

What is the best place to park the money while waiting for a sizable future market drop?

You are essentially trying to time the market. Most people will fail trying to do this and will make less money than if they did not try to time the market. For example, if the markets don't have a ...
minou's user avatar
  • 7,536
6 votes

With a lump sum severance, is the employer responsible for paying any portion of the withholdings?

Unless the values of Medicare and SS went up as a percentage of your income, then the values are probably correct. Your employer pays half of your medicare and SS tax, and the amount you see on your ...
D Stanley's user avatar
  • 136k
5 votes

What is the best place to park the money while waiting for a sizable future market drop?

All of us would like to buy stocks, ETFs and/or mutual funds after every market correction or bear market but no one knows when such events will occur or at what price they will bottom out. You have ...
Bob Baerker's user avatar
  • 76.6k
5 votes

Worried about wife's spending habits with impending lump sum

The unfortunate absolute facts are Lump sums are a huge particular problem1 2 for people with spending problems 3. People with spending problems burn through lump sums instantly. People with spending ...
Fattie's user avatar
  • 13.8k
4 votes
Accepted

I am going to recieve £10k and I am a minor

Since you want to maximize your gains but keep it accessible, I would rule out stocks and shares ISA as if the market goes down, you could lose money or be unable to take it out. Also a junior ISA ...
T Wildash's user avatar
  • 1,306
3 votes

Worried about wife's spending habits with impending lump sum

There is not a lot that you can do to force your wife to spend this money appropriately, but since divorce is one of the options on the table, it may be a good idea to contact a lawyer to write up a ...
NL - Apologize to Monica's user avatar
3 votes
Accepted

Derisk assets and reinvest proceeds (stocks to ETFs/cash)

Handle the cash I want to retain for the down payment (say I will buy a house in 6 months) about this? 5% CD? It makes sense to not risk the value of the money for the down payment. A CD is one ...
mhoran_psprep's user avatar
3 votes

Paying monthly income from a lump sum

First of all, I agree with both the conclusion in the question and Ganesh’s answer – avoid funds or stockmarket based instruments, given the short timescale and need to draw an income. However I ...
marktristan's user avatar
  • 3,710
3 votes

Paying monthly income from a lump sum

First, bear in mind that you're talking about having an average of ~£2000 saved up at any given time (if you spend all your stipend every quarter at a steady rate you'll start out with all of it and ...
GS - Apologise to Monica's user avatar
3 votes
Accepted

Lump sum investment vs SIP when I have the lump sum

Vanguard released an analysis paper in 2013 titled "Dollar-cost averaging just means taking risk later." This paper explores the performance difference(s) between a dollar-cost averaging strategy and ...
quid's user avatar
  • 49k
3 votes

Does dollar-cost averaging just means taking risk later?

Consider the following four options: (A) Invest $2000 now, hold for 12 months. (B) Invest $1000 now, another $1000 one month from now, and then hold 11 more months. (C) Invest $2000 a month from ...
Acccumulation's user avatar
2 votes

Does dollar-cost averaging just means taking risk later?

For people talking about investing $100 (or whatever) out of each check being LSI in relation to that one specific payment, how do you rationalize people electing not to do something like maintaining ...
Joe Green's user avatar
2 votes

Does dollar-cost averaging just means taking risk later?

Typically your investments can be separated in to two buckets: Assets that are allocated already (cash is an asset allocation) The allocation of assets I receive on a going forward basis The issue ...
quid's user avatar
  • 49k
2 votes

Dollar cost averaging - Should I still do it if I have a large pile of cash now?

As I see it, it comes down to a trade-off between the highest expected value (invest everything in shares asap) which is also associated with the highest uncertainty/volatility/potential downside risk....
craq's user avatar
  • 209
2 votes
Accepted

Lumpsum investing in EPF/VPF

ByNo you cannot. You have to do this as part of your deductions from company. You can request upto 100% of your basic salary into EPF. This can be changed every year or as per your company guide ...
Dheer's user avatar
  • 57.1k
1 vote

Finding the future value when investing a single sum and then an annuity

I use GNU Octave for problems like these: octave:1> A=1000 A = 1000 octave:2> N=10 N = 10 octave:3> B=200 B = 200 octave:4> k=1.08 k = 1.0800 octave:5> A*k^N + sum(B*k.^[1:N]) ans =...
juhist's user avatar
  • 6,743
1 vote

Worried about wife's spending habits with impending lump sum

If you try to keep too much money away from her, option 3 will happen because she will feel you are imposing on her. The best thing to do now is just keep it down to a normal level, what that is you ...
SushiCraft 99's user avatar
1 vote

Does dollar-cost averaging just means taking risk later?

The risk part I believe refers to delaying the investment in DCA as opposed to lump sum, i.e. in both cases, risk is taken, lump sum is risk now, DCA is chopping risk & taking it in installments (...
theimpossibles's user avatar
1 vote

Investment / Savings advice in uncertain economy

$23,000 Student Loans at 4% This represents guaranteed loss. Paying this off quickly is a conservative move, while your other investments may easily surpass 4% return, they are not guaranteed. ...
Hart CO's user avatar
  • 70.5k
1 vote

Short term parking of a large inheritance?

What are the options available for safe, short-term parking of funds? Savings accounts are the go-to option for safely depositing funds in a way that they remain accessible in the short-term. There ...
zzzzBov's user avatar
  • 203
1 vote

Short term parking of a large inheritance?

Here's what I suggest... For now, put the money in the bank. It'll keep. Find some better interest rates than your stupid bank. Move some around. Start studying about other investments. As you ...
Michael's user avatar
  • 1,181
1 vote

Lump sum investment vs SIP when I have the lump sum

Choosing between an emergency fund and investing aside, there is no reason to use a systematic investment plan when you have a lump sum ready to invest. Here are the three possible futures, and the ...
D Stanley's user avatar
  • 136k

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