So, I'm ready. Need a bit of guidance for the final steps


A 50-year investment horizon as chosen by Cortana above is longer than most investors will live and be able to invest significant money in the stock market - let alone reap the fruits of their investments for early (if any) retirement.

To put this into perspective (and yes, I’ll just as deliberately be choosing my dates as Cortana):

Cortana could have been that random guy on your new friendly internet forum telling you just the same back then as he did today: that this - or any - time was just as good as any other to invest. Go all and do the lump-sum. Cause, you know, who can predict the future?

This is a popular MSCI World ETF’s performance, including dividends - on a CHF basis:


There you have it: That would have been your 9-10 years of enduring a loss in your investment (remember that you’d have to pay taxes on dividends). Furthermore, you could have lost more than 55% within the first two years.

Now, surely I have deliberately chosen a worst-case scenario haven’t I?
Yeah, I already admitted to that. It’s easy to find such in hindsight, isn’t it? Indeed.

I am not even saying this should be basis for your investment decisions - yet 10 years are a long time, and losing more than half of your invested capital can be nerve-wracking. Would you have had the confidence and peace of mind, to “just stay the course” through that?

In the end, I think it comes down to your personal level of risk-tolerance - and what you feel comfortable with. Even if “all-in” lump sum investing may prove to be the best choice under uncertainty most of the time, statistically, it certainly isn’t always. And there’s nothing wrong in giving up a few “on average” expected returns for less volatility and lower drawdown on your overall portfolio through cost averaging (i.e. while you might lose out a bit from investing a part of your savings in higher-return assets such as stocks “later”, you will likely not lose as much in case of a bear market).


Going into finance is one of my career options but I seldomly meet people in finance who are really satisfied. Is that also your experience or are there a lot of colleagues who (intrinsically) love what they do?

There are plenty of investors with a remaining life expectancy of 50 years.

Most people who pursue FIRE will live 40-50 or more years. It’s not only about accumulating, the performance of the market will stay very relevant in retirement.

Btw, you didn’t chost the worst case scenario. As paradox as it seems: Experiencing a major stock crash early in your accumulation phase is something you should pray for and not fear for. Those 10 years of “no returns” would be ideal for all early accumulators.

As others have said, there could be one (stagflation would be a potential alternative, that is, a flat market with inflation making the real returns negative). Nobody knows if and when, though. The markets could never be this low again, or they could be down 80% by the end of June.

Which is why I like the asset allocation advice: since we don’t know what’s in the gears, we should invest our money all at once. As @Cortana writes, it is no different to invest it all now than it would be to have invested it regularly by small amounts in the past and having it in now.

But, if you’re concerned by a potential (probable) future dip, either because your portfolio would loose too much value and you’d not feel comfortable with it (or would need some of that money immediately) or because you’d want to use it to take advantage of it, then a 100% stocks allocation is probably not the right allocation for you. A more defensive portfolio could help to ease your mind for the time you need to be more comfortable and better know your risk tolerance. It’s a personal assessment you have to do but you could start right now with a 40-60% stocks allocation, then see in 6 months if you’re comfortable with it, would want to invest more (beware of FOMO - Fear of Missing Out - stocks often go high big right before a fall) or have found the ride too rocky for your taste already.

And if your purpose is to time a potential future dip, then it would be the time to test your mettle, could you invest the rest of your money right after the fall, before it recovers? If you can, good on you. If you can’t, maybe not trying to time the market is a better way for you.

Keeping money aside to take advantage of dips is generally not advised, because you could “loose” more by not capturing the gains leading to the dip than you “recover” when buying the dip. A 60/40 portfolio is considered a rather solid one and is the one used by the Trinity Study to come up with the 4% SWR (Safe Withdrawal Rate) [edit: scratch that, they have tested different portfolios. Turns out I need to do more research before opening my mouth]. As @nabalzbhf wrote, the usual way to capture dips is by rebalancing. If you feel that you are able to aim for more, that is, that you could actually jump in with your money before the market recovers, then going there with a 60/40 portfolio could give you the opportunity to try your mettle. If it happens you can’t, then maybe it was the correct allocation to begin with.

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Technically yes.
Practically though, most people won’t have significant investable capital before they torn 28 or 30.
And most in their late 70s shouldn’t depend on stock market returns but maybe switch to other assets.

Also, the mustachianpost web site has the claim: “Retire early at 40 in Switzerland”

While we’re at the long-term perspective:

Would it? From a Swiss investor’s perspective?
Well, let’s look (very roughly) at the first decade, the 1970s then…

So I’ve looked up the annualised returns of MSCI World (7.88% over the decade) and cross-checked with somewhere else online. So slightly more than 100% for over the decade. Net and taxes it would probably haven less than 100% return. Just as in your graph, that’s figures in USD.

Over that same decade (the 1970s) the USD lost of 63% of its value against the Swiss Franc.
I tried looking up customer deposit rates at the SNB and they do have PDFs with historical data on their web site - though many pages appear unfortunately blank. From what I can gather, interest rates on CHF savings should have been higher than 3% p.a. though.

Quite clearly you shouldn’t invested lump-sum in MSCI World in 1970, from a Swiss investors perspective. You would have fared by much better by leaving the capital in your boring savings account in the bank for 10 years and just do nothing - let alone touch the stock market.

You would have lost a lot of money by investing lump sump in 1970, compared to just doing nothing for more than 10 years (from the perspective of a CH investor with CHF as base currency).


Life expectancy has been going up for quite some time and you don’t drop dead at the current live expectancy once you reach it.

I think you should plan for the case that you get 95 years old.

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I’m not sure if your fear mongering is really helping others in their investment decisions.

Stocks are risky, but there is no return without risk. Either you accept that or stay in cash.

Here is my alternative opinion. I also started out with a pot of cash and transitioned to “fully invested” by cost averaging over 18 months (DCA)

I agree statistically it makes sense to invest in one go if you intend to leave it untouched for 30 years

In my case I had a plan to get to financial independence in 10 years. That was too short a time frame to risk going all in at once. DCA reduces the risk a little (although not perfect)

Whichever approach you are right to start getting in the market as soon as you can. Good luck

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I also started with DCA.
For me (without any background whatsoever on investing) it was really helpful to start slowly and buy some time to better understand what I wanted to do before committing with a big chunk of my hard saved money.
It’s also hard at the beginning to establish which assett allocation you want to have.
Imagine you invest 100% in stocks and then realize after 1 year that you’d be better off with a 60/40 allocation. All the math behind the advantage of the lump sum on the long term goes out of the window if you sell part of your stocks after just 1 year.
I know in the long term the math is against it, but the psychology is in favor.

That said, the OP doesn’t have a lot of money yet so he can probably easily go with a lump sum (or a very aggressive DCA) and adjust it’s asset allocation using next year’s savings without having to sell anything.


I have named (though not accused or anything) you personally in post above - and you’re getting back to me personally. Fair enough. :slight_smile:

It’s probably not far-fetched to say I seem to indulge in giving contrarian opinion.
That said, I don’t intend this to be fear mongering but something that wanted to address the question posed by OP with regards to whether one should invest everything at once - or spread out his investment of a available sum over time. By providing concrete examples of the risk and dangers of investing everything at once.

How to proceed personally if of course everyone’s personal decision - which, I believe, should be taken not only on the basis of “anonymous” statistics but also by personal tolerance of risk and loss.

I’d also consider these examples relevant, since 10 years is a long time. Especially compared to the investment horizon. Being 32 years old at the moment, PocketFred’s investment horizon should reasonably be no more than 25 years. For early retirement, that is - he’d be 57 then. Five years more would be pretty much the standard retirement age.

(There should be a certain “target” reached within these 25 years or less, in order to retire early. Note that that does not mean he should disinvest after reaching that target)


I agree.

I could set a certain time frame by which one intends to be “fully invested”. With regards to calculating the amounts to be “spread out” over this period, it’s reasonable to take into account future “money saved” within that time frame.


  • I feel comfortable to go all-in over five years.
  • I have 50k today.
  • I am going to save another 30k each year from earnings/wages with reasonable certainty

That makes for 200k in total to be “spread out” over the next five years.

If reducing risk is the goal, I would choose a less aggressive AA and not DCA. The later is just market timing light. What happens if you DCA over 12 months while the market is rising in those 12 months only to crash -50% afterwards? You’ll have the same problem, but made it actually worse by having a higher cost basis.

The reasonable thing would be to choose the right AA (doesn’t have to be 100% stocks) and immediately implement it.

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Yes. See my last post that I’ve written at the same time as yours, where I’ve mentioned a five-year time-frame. Which I think is fairly reasonable to reduce risk (but no guarantee either).

There is also a risk of not accumulating enough by the time you want to retire or simply retiring later then wished for. I think this is actually the biggest risk for someone pursuing FIRE. I think this shouldn’t be ignored.

How experiencing a major stock crash early in your accumulation phase is something positive ? If you DCA over the years I can see why these years of non-return might be positive in the long run when it finally goes up. However, if you invested a lump sum as you suggested just before the crash it might change everthing. Am I missing something ?

@PocketFred, I also missed the dip and just started to invest. My strategy is to invest everthing I am able to save monthly + DCA my older savings (Around 30K cash). As a new investor I feel safer doing it that way. It enables me to invest regularly and to be able to still invest a lump sum in case of a major dip.

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If so, not much lower and not for a long time. The Fed has put an implicit floor last June.

Thanks for the podcast ! It was really interesting I subscribed to it.

if you are in an accumulation phase of your investing career, you’re saving periodically, then you should get down on your knees and pray, as I wrote, for awful returns, awful bear markets, great volatility, so you can accumulate shares of no prices.

I undestood this one as stated in my previous post. In case you buy in an awful bear market, you are buying low and will reap the reward in the future when it goes up. However, it seems to assume that you buy low.

Here we are talking about investing a lump sum. What if you buy just before the crash and it doesn’t recover as fast as it has during the corona crisis ? You bought at the worse possible moment and it will affect your returns. Now, if we assume the awful bear market last a significant amount of time, you might mitigate the loss by continuing buying low periodically. However, it doesn’t change the fact that the potential of your lump sum has been “wasted” and weight negativively.

Well, let’s get one thing out of the way, which is that if you have a lump sum to invest, 80 to 90% of the time you’re better off doing the lump sum as opposed to a periodic approach. Now the periodic approach has a psychological advantage and it’s certainly sub-optimal from a return point of view, but it just stands to reason that lump summing does better than either value averaging or dollar cost averaging because you’ve got more dollars in the market over time or dollar years in the market, if you will.

Well, it seems lump sum is better statisically. But again, as I understand to have more dollard in the market over time, it exclude the scenario where you lump sumed just before a massive crash. In that scenario, (assuming you stop buying anything since that moment) you will need to wait it recovers to previous level to avenge your loss. Now, if you continue to invest periodically in the awful bear market you might be able to recover you initial loss faster as you are accumlating new shares at low prices. But, it doesn’t take away that you “messed up” on that lump sum in the first place. That’s at least how I undestrand it. If a more experienced advisor could correct me where I am wrong he is more than welcome :slight_smile:

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