Should we invest now? Husband says wait a little longer!

[syracusa]

We have built about 20,000 dollars in an online savings account (which right now pays 2.9% interest). We would like to invest this money - 10,000 in a 529 or regular money-market fund (we are not convinced the 529 is the way to go for our child's future which might happen on a different continent) and 10,000 in regular investments (not educational).

Husband says that we should maybe wait until this summer to see where the market is going (he thinks it will drop further) but I think that this is the right time to invest because we would buy low, right?

I know NOTHING about investing (only that it is good to do it ) ...so I was just wondering if you could help me with some advise.

Thank you so much.

[Broken Arrow]

Hmm, there are reasons to wait, but in my opinion, market timing is not one of them. All the insights in the world won't change the fact that it's still trying to predict the future. Not trying to be rude or anything, but can you guys predict the future?

Another important question to ask is what this money is being invested for? That would help narrow down how and where the money should be invested, and to some extent, when.

Investing is like driving a car. It is a good thing so long as it is handled in safe and intelligent manner. Otherwise, investing is also perfectly capable of wrecking your finances.

[sweeps]

These questions are becoming very common recently. The best time to invest is when fear and pessimism and volatility are high.

Having said that, I would not move all my money at once. Dollar-cost-average your way into stocks. If you have $20,000, maybe move $1,000 a month for the next 20 months. This won't necessarily give you the maximum return on your money, but it may provide the comfort level you're looking for.

[disneysteve]

What to do with the money for your child depends largely on the child's current age. The 529 might not be good if the child will go to school in another country. So invest in a regular brokerage or mutual fund account. What type of investments to select will depend on your time frame. The younger the child, the more aggressive you can be.

What to do with the other $10,000 also depends on the purpose and time frame for that money. Also, are you already fulling funding your retirement plans? If the 10K is for long-term needs, it is a great time to be getting into the market. And I would fully agree with sweeps that you could feed the money in over time. However, if you won't be touching that money for many years, like 20 or so, you'll most likely end up with the best return if you jump in all at once (but personally I don't have the cahones for that and I'd spread it out over a few months though probably less than 20).

[Scanner]

Only I can predict the future and it says "Silver will go up."

Seriously, and as Sweeps says, this is a bit repetitive.

With market timing. . .here's the problem. You can do as your husband says and "wait for the bottom" but what usually happens is that gains are had within 2-5 days.

So. . .let's say the current market continues to bear til 11,000. . .what will happen is when it hits bottom, all of the sudden one day, it jumps to 11,900.

And your boat has sailed. . .because for the rest of the year, it may only climb to 12,500. You've missed the majority of the bull run.

And if you are going to miss the bull runs. . .well, you may as well just put your money in bonds then.

[sweeps]

You can ... "wait for the bottom" but what usually happens is that gains are had within 2-5 days.... You've missed the majority of the bull run.

And if you are going to miss the bull runs. . .well, you may as well just put your money in bonds then.

Well said, Scanner.

[LivingAlmostLarge]

Every time you think it hits bottom and can't go lower, it does. Then when you think it won't go up it does.

Does it really matter?

[syracusa]

What to do with the money for your child depends largely on the child's current age. The 529 might not be good if the child will go to school in another country. So invest in a regular brokerage or mutual fund account. What type of investments to select will depend on your time frame. The younger the child, the more aggressive you can be.

What to do with the other $10,000 also depends on the purpose and time frame for that money. Also, are you already fulling funding your retirement plans? If the 10K is for long-term needs, it is a great time to be getting into the market. And I would fully agree with sweeps that you could feed the money in over time. However, if you won't be touching that money for many years, like 20 or so, you'll most likely end up with the best return if you jump in all at once (but personally I don't have the cahones for that and I'd spread it out over a few months though probably less than 20).

The boy is 2 and a half and we have another due in May. As of summer we will start saving double the amount for educational purposes because, well...there will be two (definitely not easy). We sometimes joke that if the second (a girl) will get my husband's beautiful blue eyes and some overall fortunate appearance, we will no longer need a college fund for her, we'll just plan on marrying her up. (I am not serious).

Yes, it is very likely that we will relocate to Europe well before they reach college age so 529 may not be for us.

As far as I know, yes - we are both already fully funding the retirement accounts (I contribute the maximum the company can match with the maximum).

The money to invest ...I am not sure what it is for right now.
For now it is just for NOT leaving it in a savings account with an interest rate that cannot even keep up with inflation. Our goal for the not-sure-how-near future is to put together enough for a serious payment on a house if not the entire sum so we will never have to leave on a mortgage again, which I loathe.

I come from a culture where people would rather leave with momma-in-law for all eternity than get a loan from a bank . I've had many say that "free child care is a plus so why would I ever want to get my own place on a mortgage is beyond me...".

While we do not have those kind of options here, I still resent not having MY OWN roof over my head and having to live in a banks' house instead.

[Ima saver]

I agree with dollar cost adveraging into a mutual fund! You need to fully fund your retirement before saving for college.

[cptacek]

We sometimes joke that if the second (a girl) will get my husband's beautiful blue eyes and some overall fortunate appearance, we will no longer need a college fund for her, we'll just plan on marrying her up. (I am not serious).

Great idea!