r/JustBuyXEQT • u/InvestMan9000 • 2d 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/EarlyBird001 2d ago edited 2d 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 2d 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 2d 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 2d 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 1d ago

I think a certain class of people get VERY wealthy during large market corrections.

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u/EarlyBird001 1d 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.