Sound Investing DCA vs. Lump Sum, Not Trusting SCV, Maximizing Roth, Moving From Ultimate B/H to Smaller Portfolio and More
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Sep 4, 2024 The discussion kicks off with highlights from the upcoming Boglehead Conference, focusing on investment strategies. A deep dive into whether to invest a lump sum or dollar cost average reveals historical data supporting both methods. Listeners are guided through the intricacies of small-cap value stocks, exploring their low P/E ratios. Simplifying investment portfolios is suggested for better diversification. Tips on maximizing Roth IRAs and strategies for using T-Bills as equity risk reducers add valuable perspectives for savvy investors.
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Inheritance Investing Strategy
- Invest a large inheritance as a lump sum for statistically higher returns.
- Consider dollar-cost averaging or a combination of both to manage emotional risk.
Roth IRA Strategy
- Complement limited 401(k) options by holding small-cap value in Roth IRAs.
- Diversify within small-cap value by splitting between Avantis and Dimensional Funds.
Roth IRA Investment Timing
- Invest your entire Roth IRA contribution into AVUV (Avantis small-cap value) at the beginning of the year.
- This is a form of dollar-cost averaging and might be more efficient than spreading investments throughout the year.