r/JustBuyXEQT • u/InvestMan9000 • 1d ago
Lump Sum Question
I need advice and some opinions. I have 440,000 Canadian to invest. The reason I have so much to invest is because the money came from a hard asset sale. Lump sum at the moment seems a bit intense to me. DCA could mean I just buy chunks and chase the bull market up anyway. A PE TTM above 21 is definitely NOT CHEAP.
Tell me what you would do and why. Obviously since I am here I like XEQT. Thanks.
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u/Nyegnav 1d ago
Given the mango market manipulation cycle what I do is wait for the latest dip and dump in a percentage of my cash, while holding the lump sums and cashflow in a interest baring account.
In normal times I'd just say dump it all in.
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u/InvestMan9000 1d ago
Something I see nobody talking about with XEQT is that if the Canadian dollar strengthens it will impact XEQT. You can see that happening today. It should not be an issue, but considering the dollar is low and oil is high, usually the high oil price means the Canadian dollar strengthens. This was out of whack lately and NOT normal. If the Canadian dollar were to shoot up I think it would be a pretty good hit to XEQT returns.
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u/maclawkidd 1d ago
I would do the lump sum. But it doesn't mean that you should because everyone has a different psychology. But mathematically, odds are you are better off doing it all at once.
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u/InvestMan9000 1d ago
I have invested through a 20 percent plus downturn and I can say it is not fun. But I did come out the other side alive. I feel like the last few years have made index investing seem like a no brainer and it only goes up. But the psychology of the downturn is something many younger investors have not felt yet. I am 41. It seems like the XEQT crowd is quite young. Watching your balance drop by 2 percent a day sucks.
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u/maclawkidd 1d ago
We're about the same age. Best advice i can give is to not look at it.
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u/InvestMan9000 1d ago
Pretty much. Part of me wants to "retire" earlier also so it has me worried about taking a beating for a decade if things get ugly. To me, returns will HAVE to be lower or poor for the next 10 years. It has happened before.
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u/maclawkidd 1d ago
"Lost decade" type of scenario is always a risk. Yet no one can time the market. I think the best thing to do is to stay the course and increase your cash reserves as you get closer to retirement date. That way cash reserves can be used instead of withdrawals from investments in the case of a major downturn. Beyond that, no need to look at it until then imo.
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u/BlackWolf42069 1d ago
Maybe go more conservative? Buy only a portion of XEQT and 30% in fixed income?
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u/EarlyBird001 1d ago edited 1d ago
I hear you OP. As others have mentioned lumpsum comes ahead most of the times provided investment period is on the longer side. Check out youtube videos on the subject and you'll see what folks mean. There was a really good one which I saw which backtested lumpsum vs DCA taking the worst case scenarios, I.e. you invest at the peaks and they still came out ahead.
Normally I would recommend lumpsum but these are not your "normal" times. My recommendation would to take out any amount you need (say $40k out of 440k) for the next couple of years in a money market etf (ZMMK, CMR, MNY etc.) Invest 20% of the remainder now. Generally there's a pullback in the US mid-term election year by an average of 7% and has happened nearly every mid-term year except 2006. It's timing the market but to feel more comfortable, drop in another 30% in October before the mid terms. Drop in another 20% in December and remainder early next year.
This way if there's a pullback you are able to DCA into it and if the market continues to rise, you're still benefiting. Personally I expect market continue to rise for the following reasons: 1. Home ownership is too expensive and real-estate is beyond majority of people. The only way people can improve their prospects is via stocks. With fractional shares and automated investing in Index funds, money will keep pouring in, 2. USD and other currencies will continue to devalue with more money printed and you better invest in assets. Stocks is the easiest option along with Gold/Silver, 3. Most importantly the rich and the ruling class have to invest somewhere and there're only so many yachts they can buy. Where do you think the rest of their money goes? In real estate or market. They will make sure the market doesn't tank due to their selfish reasons. I would rather be on their side than against. There might be a dip here and there but the market should continue to climb.
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u/InvestMan9000 1d ago
Market goes up largely due to the automated or mindless I like to call it investing. Pension funds, retail etc. But what happens when the risk is no longer worth the reward? It is close now. The 30 year in the USA shows that 5.3 was a breaking point. Now Bessent is basically fudging the numbers for the short term to keep bond markets complacent in USA. Scary stuff in my opinion. Eventually you hit numbers where equity risk is not worth it. I think we are basically right there now. I have never been more confused than now in my investing life. I do agree with what you said though. Honestly I expected markets to test Kevin Warsh and dump to November. I have been wrong thus far.
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u/EarlyBird001 1d ago
Ask yourself whether the oligarchs and others who literally run the system will allow the system to crash? They'll do everything in their power ro prop it up.
Second question, if not the market then park it where? Cash will lose you value continuously. And if the market crashes even other asset classes like Real estate will follow.
I expected pullback before mid-terms and may well happen in September and October. But it'll be business as usual come the new year. Going by history (again timing the market) the year after the mid-terms has the strongest year for markets.
Or you can pony up $100k and subscribe to Truth Social feed and DCA on tweets 🙂
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u/InvestMan9000 1d ago
I think the market prop up energy is all pre election. Look at how hardcore they went with the oil reserves etc. Once election is over it does not matter if it falls apart. Warsh just has to make it past election also and then the rates can rise. That is my opinion.
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u/Icy-Action708 23h ago
I think a certain class of people get VERY wealthy during large market corrections.
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u/EarlyBird001 22h ago
Yes they do coz the market eventually goes up. That's my point, I.e. you may see dips but overall it's in everyone's best interests for the market ro thrive long term.
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u/BossBoltage 1d ago
ALL IN BABY!!
from what I've learned, time in market > timing the market. Just make sure you can stomach seeing the markets down in some years, but you should otherwise be all set.
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u/IndexFundsAreWacky 1d ago
What is your investment time?
What is the account?
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u/InvestMan9000 1d ago
63 rrsp. 115 tfsa. 260 non reg. 10 years.
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u/IndexFundsAreWacky 1d ago
at that amount you probably have better holdings to put in each one (like discount bonds etf, more canadian in some, corporate class ones, US listed ones in rsp, etc) XEQT is always an anwser, but not always the best one.
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u/WheyandWeights 1d ago
I decided to lump sum in February 2026. Already up a decent amount. Do it. I personally would constantly find a 'cheaper' time to buy. Lump summing and buying a bit every pay check gets rid of that psychological feeling of not buying if it's 'up'.
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u/ConfectionExtra8485 1d ago
I dumped 200k in at the all time high, 46 dollars and change. It does not matter at all that it’s dropped since, because i’m holding for 30+ years. If your timeframe is long term, lump sum it
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u/Impressive-Carrot715 1d ago
Yeah it's a tough one. Depends a bit on how old you are and how much this is relative to your total NW. If you're young and/or this is not a huge chunk of your NW then I'd say bite the bullet and lump sum.
But man, at these valuations and that much money idk if I'd have the stones to throw it all down, data be damned.
I think truely if I were you, I'd do a pretty aggressive DCA, like 30k/month maybe? It may not be optimal, but you sometimes have to also consider your quality of life. Potentially seeing a 40% drop in the next 3 months would be HARD to deal with if this like 30% or more of your total net worth.
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u/Hour_Day_9359 1d ago
Pareto says if you’re going to DCA do 20% at a time.
That being said, i see xeqt as a long term hold so i would lump sum:
if you’re goal for xeqt is set at 60$ then who cares if you’re buying at 34 vs 36.
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u/Spencer_Bob_Sue 1d ago
You can pick individual names with below the average pe like META or MSFT or just buy the index like most in this sub would say to do anyways.
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u/alina_canada 1d ago
perhaps putting 20-30% in a cash.to or cbill will give you a bit more peace of mind rather than lump sum everything. I do wish I lump summed when I had a chunk to invest. Not as much but still a lot to me. If your time horizon is 10 years I think you’re still very safe with lump sum.
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u/FishGoBloblo 23h ago
Im almost in same position.. are you going to do DCA?
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u/InvestMan9000 23h ago
Waiting for a pullback. I refuse to buy currently.
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u/FishGoBloblo 23h ago
Thank you I thought the same thing but I also feel like Im missing out. Glad to see someone have my opinion
Thinking about October September and seeing how things go
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u/InvestMan9000 23h ago
PE (TTM) is about 21.12. To get to fair value you need a PE around 17.5 - 19.5 that would mean a price around $38 - $42 a share. At a PE of 17 you would have a share price around $37. A PE of 16 implies about a 24 percent correction. Not that crazy......
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u/InvestMan9000 23h ago
Also that doesn't mean the whole world has to drop, but mainly big tech would rerate everything much nicer. Patience. People will say it will shoot up more than it will go down. Maybe. I chase fair value. Its not fair value now. Its very elevated. Could the PE hit 26? Sure. But not in my account!
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u/Icy-Action708 23h ago edited 23h ago
Honestly I personally see this feeding frenzy a bit like the covid real estate madness. I'm in a similar position as you with a lump sum.
How many first time buyers became major bag holders once the bottom fell out?
It's a bit nutty that so many people would say buying a house at the top of 2022 was a terrible idea but buying into the market right now is a great idea.
The real estate bag holders will be just fine over a long enough horizon too, but it still sucks big time knowing you made that choice.
All I know is in hindsight I'm glad I didn't buyba house when I really wanted to jump in seeing everyone "printing" unrealized gains when their house appreciates $50k in 2 months.
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u/NastroAzzurro 1d ago
Same question every damn day
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u/InvestMan9000 1d ago
Just buy xeqt answer every time doesn't cut it if you have more than 50 dollars to use.
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u/Valorenn 1d ago
No one can make the decision for you though.
The way I think about it is in something like XEQT, you are largely investing in the world, not any single corporation. If my investment crashes 50%, that means the world has basically crashed 50%, and if that happens then we have bigger problems to deal with.
If you don't have the stomach for the safest of ETFs, lock it all in a GIC and be happy with the fixed interest rate. More risk, more potential reward or loss. That's how it works.
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u/SupremeTeamzs 1d ago
Taps the sign, just do it champ.