Sold 50% of portfolio at the bottom, want to reinvest but how?

OpalMiner11

Sorcerer2018 said:

I would say before you put any more money in the market, you have a good long think about that you are trying to do. Their was no need to sell unless you believed the companies where going bust or the dividends was disappearing for ever. Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

Thanks - that is exactly what I thought - that companies would all start going bust and my investment would go to zero (vanguard life strategy 80).

bostonerimus

OP, most importantly don't beat yourself up. Everyone has made mistakes and we will all make them in the future. Given the market's volatility being in cash isn't a disaster. So what to do now? Just go back to the fundamentals of long term investing; decide on an asset allocation that is appropriate for your circumstances and stay invested. I don't think it will make much difference for a FIRE strategy if you put everything in right now or do it over a number of months. If you want to wait for a correction put some firm numbers on it ie invest when your chosen index is at a certain level of after a certain amount of time. 

Thrugelmir

Sorcerer2018 said:

Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

What are you backing to generate a stable dividend income ? 

Prism

Sorcerer2018 said:

I would say before you put any more money in the market, you have a good long think about that you are trying to do. Their was no need to sell unless you believed the companies where going bust or the dividends was disappearing for ever. Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

Even is the dividends do disappear or reduce it shouldn't matter - plan on total return and sell units to make up the difference.

Sailtheworld

OpalMiner11 said:

Sorcerer2018 said:

I would say before you put any more money in the market, you have a good long think about that you are trying to do. Their was no need to sell unless you believed the companies where going bust or the dividends was disappearing for ever. Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

Thanks - that is exactly what I thought - that companies would all start going bust and my investment would go to zero (vanguard life strategy 80).

Concentrate on those things you can control on the road to financial independence such as an increased savings rate and  earning more etc.

If VLS80 was and still is the correct vehicle I'd just get back into it.

Sailtheworld

EdGasketTheSecond said:

Gold, silver, and related mining stocks are the way to go

If the OP is confident that his risk profile is along the lines of a VLS80 then investing into gold, silver and mining stocks would seem a bit reckless.

Ciprico

I would drip feed. There is little reason to think the markets will go up much further, and plenty of reasons to think they could drop (again). 

On the positive side
- seems Coronavirus is on the way out (for now!)
On the negative side
- the actions (costs) govenrments have taken
- second wave of Coronavirus
- Brexit (yeah I know, it's small in the bigger picture - but still a local negative with negative sentiment)
- USA shares were expensive before the crash
- many companies can't/won't bounce back
Maybe now's not a time to sell, but you have taken the hit, you can be cautious on re-entering on the basis there is probably more downside than upside in the short term

Sorcerer2018

Prism said:

Sorcerer2018 said:

I would say before you put any more money in the market, you have a good long think about that you are trying to do. Their was no need to sell unless you believed the companies where going bust or the dividends was disappearing for ever. Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

Even is the dividends do disappear or reduce it shouldn't matter - plan on total return and sell units to make up the difference.

That certainly is one way to go, and the old 4% rule is something i know some people do, but i prefer to take the natural income from my investments. 

Sorcerer2018

Thrugelmir said:

Sorcerer2018 said:

Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

What are you backing to generate a stable dividend income ? 

i have a large portfolio of investment trusts, many of which have cash reserves to smooth out dividends, this off course is not guarantee but only 2 out of 37 trusts have stopped their dividends so far (hopefully temporarily).

Barry_Bear

You have probably already had plenty of sound advice. But here is my reaction to your post.

If you are investing for the long term, you should not have been even tempted to sell, but you did. So start by asking if the portfolio equity allocation matches your risk tolerance and investment time horizon, and set the allocations accordingly.

If your asset allocation is suitable, with mostly say a global equities index fund, and maybe some cash, gold, high grade bonds, then you would have found yourself rebalancing into equities in the downturn, not selling.

So decide on your allocations, don't waste time, buy back into all the asset allocations you need, then stick with it.

Whatever you do don't make it worse by waiting or trying to time the market.