How should I invest $200K?

I’ve got $200,000 ready to invest and want to improve my portfolio strategy.

Background:

  • 36 years old, married, newborn
  • Pre-pandemic mortgage, no other debt, emergency fund is set
  • Freelance income around $100K/year, spouse earns ~$88K

Current Investments ($650K total, including $200K in cash):

Individual ($300K total)

  • Stocks (selling some losers and bubble tech)
  • VOO, SPY
  • Cash/MMKT: $130,000 (ready to invest)

ROTH IRA ($128K total)

  • Stocks, VOO, SPY, FXAIX
  • Cash/MMKT: $20,000 (ready to invest)

Traditional IRA ($146K total)

  • VOO, SPY
  • Cash/MMKT: $50,000 (ready to invest)

SEP IRA ($60K total)

  • VOO

529 Plan ($10K)

  • Not sure if I should add more now?

I started investing about 10 years ago but didn’t realize VOO, SPY, and FXAIX are pretty much the same thing. Trying to be more strategic now.

My Questions:

  1. Diversification & Rebalancing: I’m comfortable being aggressive now but need to start thinking about rebalancing as I get older. Should I start buying Bond ETFs (BND, TLT, etc.)?
  2. Index Funds Strategy: Should I just keep adding VOO/SPY, or would it be smarter to separate them by account type?
  3. Dollar Cost Averaging (DCA):
    • I was thinking of investing $1-2K per week in index funds. That would deploy the $100K in my taxable account within a year.
    • Should I scale it down to $500-1K per week in case we see a recession in 2026?
  4. 529 Plan: Should I dump more in now while my kid is young?

Looking forward to your thoughts!

Check out Bogleheads.

Ash said:
Check out Bogleheads.

Yep, this is the way to go.

Why hold so much cash? Are you trying to time the market?

Historically, lump sum investing beats DCA.

Rory said:
Why hold so much cash? Are you trying to time the market?

Historically, lump sum investing beats DCA.

“Just YOLO it into Dogecoin, no regrets!”

Look into a target date index fund.

Pick an asset allocation and stick to it, rebalancing over time.

Example: 60% US, 30% International, 10% Bonds

  • That could be VOO/VXUS/BND
  • Every few months, check if your percentages have drifted and rebalance (sell high, buy underperforming assets)
  • Bonds are best held in tax-advantaged accounts

I’d recommend putting a small % into bonds to see how they behave. They help with stability, provide income, and let you rebalance in downturns.

Right now, you’re 100% US stocks, which worked great the last decade, but diversification could help long-term.

@Bowie
Fun fact: about 30% of S&P 500 revenue comes from outside the US, so technically, S&P 500 is already 30% international.

Freddie said:
@Bowie
Fun fact: about 30% of S&P 500 revenue comes from outside the US, so technically, S&P 500 is already 30% international.

International investing is painful sometimes. Watching the S&P return 25% while international markets return 6% is frustrating. :sweat_smile:

You need short, mid, and long-term income sources. Also, a mix of low, mid, and high-risk investments. Let me know if you want more info!

Teal said:
You need short, mid, and long-term income sources. Also, a mix of low, mid, and high-risk investments. Let me know if you want more info!

This is AI-generated lol.

Teal said:
You need short, mid, and long-term income sources. Also, a mix of low, mid, and high-risk investments. Let me know if you want more info!

Okay, AI bot, explain more! :joy:

Man, I’m just trying to live off my $200K and flip small % gains.

DCA into VTI over the next six months.

Following this thread—similar situation, except I’m renting and planning to buy a house in the next year or two.

Why hold $200K in cash? Are you waiting for a dip?

At 36, if you won’t touch the money for 20 years, just put it in 100% VOO.

Also, check out tax-advantaged options for your kid’s education (529 or similar).

75% VOO / 25% QQQ

DCA is just a psychological crutch. Put it all in tomorrow.

You’re in a solid spot with strong investments. Since you’re heavily weighted in equities (VOO, SPY, FXAIX), adding some bond ETFs (BND, TLT) might help balance volatility.

  • Consider a 90/10 or 80/20 stock/bond split based on risk tolerance.
  • DCA $1-2K per week into VOO/SPY is a safe play. If you’re worried about a 2026 recession, $500-1K per week would slow things down.
  • Keeping VOO and SPY separate by account doesn’t matter much—focus on tax efficiency (bonds in tax-advantaged accounts).
  • 529 Plan: Since your child is young, adding more now maximizes tax-free growth.

Also, for cash, check out Banktruth to find the best high-yield savings accounts.

Hope this helps!

Way too much cash sitting on the sidelines.

Half in S&P 500, half in Magnificent 7 stocks. Vistra has been amazing.