Time in the market beats timing the market.
this post was submitted on 23 Feb 2025
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The S&P500 is almost always at an ATH, for the record. Buy as soon as you have the money and buy often. The market is irrational, and doesn't always reflect reality. Efficient market hypothesis says that all this "scary risk" is already "priced-in" instantly. If there's money to be made off this uncertainty, it's been made. Anything else is just gambling.
This sort of stuff is scariest when you're just getting started, but remember that you're probably looking at a multi-decade timespan. It doesn't matter what happens next week in the grand scheme of things.
This line of thinking is why Boggle (?) is a genius. Just choose large low fee index funds and time in the market always wins. Don’t try to play the game.
I mostly put mine in VT, VTI, QQQ, and SPY. Idk how SPY and VOO compare
Definitely. I have my retirement in a large cap, mid/small cap, international and bonds. My rIRA is a low cost Vanguard age based portfolio and my 529 is mostly large cap. I still have quite the horizon on those accounts so I don't mind being a bit risky, but for this 'savings' account I should be a bit more safe. I think I got my answer here. I'll hold off on VOO and just use HYSA as I'll probably want to try making a down payment on a house in the next 5 ish years.
Thanks for sharing! That sounds like a smart plan.
Reminds me when I had a bit of cash I was keeping it in a SCHWAB HYSA, I forget what it was called. You had to buy some “stock” of theirs and it paid an average 5%
What HYSA are you using?
Currently Wealthfront at 4%
Great advise, thank you.
For other people's benefit:
VOO: Vanguard S&P 500 ETF, the ETF version of VFIAX
ATH: "all time high"
As for the question, if the choice of putting money into VOO will be made based primarily on the market conditions, that is market timing, using the definition from the Boglehead wiki here. Part of the Boglehead investment philosophy is to "stay the course", which means following through with whatever your asset allocation plan is, irrespective of market conditions. The primary benefit of this is to control risk, since although no one can predict the future of stock prices, one's exposure to the markets (or lack thereof) is directly controllable.
If you don't currently have an asset allocation plan, then at least think about what you want this money to do: is it retirement, late-life healthcare, early-life healthcare, child education fund, emergency fund, or just spare money? The objective and the time horizon for that objective will indicate whether VOO is a good choice or not.
Any goal short of 5 years is, IMO, generally not a good choice to put into a large-cap index, because the market can -- and has -- suffer sustained downturns for as long, meaning the goal could be missed and without any time for a positive correction.
Those are all great points. This would basically be a longer term general savings fund. I have other funds for retirement, education, etc.
I do have a goal of buying a house in the next 5 years, but that would basically be putting RSUs into this (or another) account as they vest over the next 5 years. So maybe this wouldn’t be the best choice for that type of strategy
VOO is just the S&P 500, which is large-cap US. It doesn't make any sense to go with VOO and not also expand elsewhere, VT would make more sense as its global and market-cap weighted.