I’ve just inherited a six-figure sum and am interested in investing using the Couch Potato approach. What is your opinion on entering the market now, given it’s at a record high? — C.T.
This is the most common question I hear these days. It took almost four years for investors to finally admit we’re in a charging bull market—US markets are up more than 150% since March 2009—but most of the chatter now seems to be about a looming correction. This week, one noisemaker even came up with 21 stock market warning signs giving global investors cold sweats. Hard to believe he could only come up with 21.
Even if the media weren’t shouting like this, investing a six-figure lump sum would still be difficult. That’s especially true with an inheritance, since it often takes a while for beneficiaries to feel like that money really belongs to them. But in general—assuming you’ve done a careful risk assessment and have a target asset allocation in mind—it’s usually best to invest the money immediately. Here’s why:
Not everything is at an all-time high. While US markets have been on fire recently,