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  1. DCA (as it applies to a pile of cash) mitigates risk in the sense that you aren't invested in the market, but not being invested in the market isn't a valid strategy. Bonds are a valid risk management strategy, sitting on cash is speculative and locking in the erosion of inflation. One easy way to see what a poor risk mitigation strategy DCA is, is to imagine somebody who is already fully invested and they're scared of market risk. Nobody in their right mind would ever recommend that this person take a lump sum out of the market and slowly dribble it back into the market. Sure doing so reduces risk, but I think we can all see how foolish that approach would be. The reason people can't see how foolish it is if somebody has a windfall is because we're incorrectly anchoring to the value of the portfolio on the day of the windfall and for a reason I can't explain people don't seem to anchor to the value of the portfolio on the day they're fully invested (at least in the context of DCA). Investing everything you have in the market isn't speculation or a gamble. Investing in single stocks is a gamble. Investing for the short term is a gamble. Investing in a single sector is a gamble. Putting all of your portfolio into the market is just plain investing. However, pulling money in or out of the market based on short term gyrations...that my friend, that's speculation.
  2. Yes. Time out of the market, on net, hurts returns. On average the stock market obviously goes up, otherwise we wouldn't put money in it. So if you sit on a pile of money for a fixed amount of time and slowly drip it into stocks, then statistically speaking you will miss out on gains (not losses). That's why you hear the phrase "time in the market, not timing the market" (or something along those lines). Of course, if you look at any individual time period you either lost or you won, but you're more likely to lose with DCA. The only utility of DCA is convincing fearful people stuck in a fallacy to get their money in the market. Of course I'd argue strongly that if they're so fearful then the real problem is their asset allocation. Now if you're just putting money in the market each time it becomes available to you (i.e. payday) then I don't really consider that to be a strategy. You're just investing whenever you can, not when you choose to believe it is a "good" time to invest.
  3. People conflate DCA a lump sum with regularly investing money with each paycheck. The the former has a lower expected return, the latter is absolutely recommended.
  4. I believe the IRS explicitly ruled that you can create a wash sale between your taxable account and your IRA. I don't believe they've explicitly ruled about employer sponsored accounts. I believe the spirit of the wash sale is pretty clear that it should apply to all accounts, but until the IRS makes it explicit then we don't know for sure. I don't play in that grey area.
  5. Without getting into the weeds, the Wash Sale is relevant to 30 days before Tax Loss Harvesting and 30 days after. If you wait 31 days after the sale, you could have bought right back into the fund that you sold from. When people tax loss harvest they often want to avoid being out of the market. To accomplish this they will immediately exchange from the fund with a loss to another fund as long as that other fund isn't "substantially identical." This is why whyme talked about exchanging a total market us fund for an S&P 500, they both have extremely similar performance, but you can argue the absence of small and medium size companies in the S&P 500 fund prevents it from being considered "substantially identical." This is a mental accounting fallacy. It isn't logical to treat money that is currently in cash differently than money that is currently in the market. We all have a total portfolio (regardless of what assets it is split between) and we all have to make a decision (every day) as to how that money is or isn't invested. What your portfolio was invested in yesterday has no bearing on what it should be invested in today. Either you think it is a good to have Y dollars in the market or you don't, it doesn't matter where those dollars were invested yesterday. This is absolutely marketing timing and market timing is usually considered cautious/fearful. Decisions you make based on short term market movements and this idea that you can predict the short term future, well that's market timing. Market timers often find ways to do the wrong thing twice. During a bad market they won't put their money in because they're being cautious. During a bull market they'll pour it all back in because things are "good". The proverbial sell low and buy high.
  6. The IRS says that if you buy a "substantially identical" replacement then it'll trigger a wash sale, which you clearly do not want to do. The IRS has not explicitly defined what "substantially identical" means. Somebody could make the proposed exchange and claim a loss. However, in the event of an audit, I sure wouldn't want to be in the position of making the argument that those two funds aren't substantially identical. Just a word for anybody reading these comments. This is a form of market timing and is particularly dangerous because this is exactly how people miss the recovery after a crash. If you want to invest successfully accept the reality that nobody can predict the short term future so all you can do is buy and hold (no matter what is or isn't happening).
  7. Any time you ask yourself a question that begins with “given what the market is doing now” it is almost certainly going to lead you to engage in market timing You have to get comfortable with the idea that nobody can accurately predict what the market will do over the short term. Trying to time the market is probably the number one way people lose money. To answer your question, it’s always a good time to leave a high cost vendor for a low cost vendor.
  8. You haven't spent even a second providing proof at all. You've just gotten exasperated and said I was blatantly wrong without providing any argument.
  9. Tony, when I say something that is false, just provide the evidence and I'll immediately change my mind.
  10. My personal political views aside, the data is clear that we can’t both sides this. Fox News hosts have consistently and repeatedly reported things that are verifiably untrue. The same cannot be said for other outlets like CNN or the NY Times. Biases are subtle and subconscious and professionals do everything they can to overcome it, sometimes swinging too far in the other direction. Propaganda is something else entirely and for the sake of precision alone we shouldn’t confuse the two.
  11. I didn’t know that. I’m cheering for an immediate recovery. I don’t enjoy losing money, but I can think of one consolation prize of this well timed downturn 😁 😈
  12. haha, I’m old enough to remember Q4 of 2018 when we were within a hair of a bear market when the world’s two largest economies were locked in a pointless trade war. Nobody knows the future. I hope things get better quickly, but maybe they won’t. The huge market swings have really been something to see though.
  13. I don’t try to convince anybody to do anything because in my experience 90% of the time it is wasted energy. However, when people ask me how I feel, I tell them how much I’ve lost (usually quite a bit more than them) and how calm I am about dumping my next paycheck into the market. I think people find that level of confidence and emotional stability to be reassuring. I know nothing and I don’t think anybody else does either. For all I know the virus was just the spark that triggered the selling process on an already overvalued market rather than being the main driver behind the selling. Let’s assume the sell off is 100% because of the virus. Financially speaking, it seems like a virus with a low mortality rate is less scary than a fundamentally and structurally unsound financial system where every institution is on the brink of collapse. It wouldn’t surprise me at all if we bounce back from this within the next 12 months.
  14. What do you think is unique about this? Seems quite standard to me.
  15. If you save less than the IRA contribution limit (6k for those under 50, 7k for those over 50) the just stop the 403b and only use an IRA. If you save more than the IRA contribution limit then figure out what 403b and 457b vendors you have access to, stop National Life group, and fund some combination of an IRA and a better vendor (we need more information to be more specific on that split). NOTE: Your IRA doesn't have to be a Roth, it can also be a traditional. The same can be said for most 403b and 457b plans. The choice between Roth and Traditional should be made intentionally, you shouldn't simply default to a Roth IRA and a Traditional 403b.
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