Snuffaluffagus

I am selling my old house I purchased in 2013 and now it's a hot seller's market where I live. I'll probably be putting about 160-170k in my pocket after paying off the loan, realtor fees etc. I have an individual trading account on Fidelity and I was thinking of investing it in FSKAX or another total market fund, but also don't want to put my eggs in one basket. I'm not really interested in purchasing more real estate at this time.

My 2021 Roth contribution is already fulfilled.

Thanks

tnkrdrvr

Personally, in that position I would look invest it in a regular investment account with Fidelity or your broker of choice. Talk to a CPA or fiduciary investment advisor about best ways to invest with a non tax advantaged account, since there are different tax traps to deal with. Some mutual funds that work great for your IRA/401k suck in a regular account.

742Dash

Pilots are the last group that I would poll for investment advice. Seriously.

Fidelity has a lot of tools that you could use to pick investments appropriate to your risk tolerance and time horizon. And a phone number to call if you want to get professional advice. Some time spent digging around the Fidelity site might be beneficial.

Excargodog

Put it in a Vanguard money market fund for safekeeping now and then transfer it into either their 500 index fund or their total stock market portfolio fund - 8% per month over the next 12 months. Reinvest the dividends and ignore it until/unless you really need it. If you mess with it you realize the capital gains which - while still better than paying regular rates - you don’t want to do if you can avoid it since unrealized capital gains sort of wind up compounding tax free until they are realized.

It’s not as good as a 401k but if you’ve exhausted your other more Tax efficient options it’s reasonably good and you can pull the dividend income out (which you will be taxed on continuously to cover the taxes generated if you need to.

Winston

Lots of research out there on the inter webs that debunks the benefit of dollar cost averaging vs lump sum investing. It all essentially boils down to “time in the market” and the compounding interest that follows from it is far more effective (and possible) than “timing the market”. DCA is preferred rather than building up a pile of cash and trying to find the “perfect” time to invest, but if you find yourself with a mountain of cash already and wish to invest, going all-in ASAP is the historically a more beneficial strategy. And yes, every year I even go 100% contribution to my 401k until I hit the $19.5k limit so I can maximize my exposure to the stock market which, historically speaking, rises far more than it falls.

To the OP, I was in almost the exact same situation you found yourself in a year ago and followed precisely what you proposed: It all went into a super low fee total market index fund. I have zero regrets.

As always: Past performance is no guarantee of future returns.

742Dash

The current Shiller P/E for the S&P 500 is 34.26. The historic mean is 16.78.

The current combination of valuations and interest rates is unprecedented, and a reasonable person might want to DCA into this market. I saw this kind of confidence before as the year 2000 dawned, and it then took 15 years for the Nasdaq to recover (17 years if you consider inflation). The S&P 500 took 12 1/2 years, and for the 10 year period from March 2000 to March 2010 the real S&P 500 return with dividends reinvested was minus 24.68%.

Winston

It’s not just valuations and interest rates that are unprecedented, it’s the trillions of dollars of stimulus money being pumped into the economies around the world. In this environment, even with P/E ratios this far out of whack, where can one deploy capital and receive a reasonable rate of return? Asset values are high, and they will continue to rise because there is no other better option.

I’m not brushing aside your concerns, because they are indeed the most unprecedented things we’ve seen in 100 years. Some day in the future the music will stop and we’re all going to wake up with a massive hangover. Until then: eradicate debt, diversify investments, and plan for a rainy day. That being said, I still have about 2/3 of my net worth tied directly to the stock market and am content with that risk/reward ratio.

I also notice that you’re retired. One’s time horizon definitely determines one’s comfort level with volatility. I assumed the OP was thinking in terms of multiple decades. If you’re touching this nest egg in less than 5-10 years that changes quite a bit.

SonicFlyer

https://www.paulwinkler.com/videos/

TransWorld

If you are retired and are only withdrawing 4% per year, you are pretty safe. What most endowments and foundations conservatively do. My investment manager agrees. Even using a Monte Carlo simulation using data since 1926, that is a pretty safe withdrawal rate if you are 100% in stocks. I am comfortable with what they show me.

Rama

Don't know your age, but retirement and avoiding taxes may become more important as that gets closer.
The fund is a good way to go for some of it, but more than likely taxes will go up in the future and a strategy to avoid paying more than you really have to is worth considering.
Or as have been told many times "Seek professional help."