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Hello RCBBJ:
Is it better to max out 401k ($10,500) in first four months to get that money working for you, or dollar cost average over the year?

I just wanted to add on to some of the good stuff CABob wrote. Do look into the employer match issue mentioned. I've provided an article that discussed a bit of number crunching done on several different DCAing time frames. But the article only uses two time periods that relate to your case, 6 months and 12 months. So what is at issue is how will DCAing over only part of the year affect risk, and will the added risk, if any, be worth it. Take a look at the link provided below to look over the data Mr. Bernstein has.
http://www.efficientfrontier.com/ef/997/dca.htm
Maybe it will help some.

Same question for an IRA. Max it out in january or contribute over the year.

The article also talks about lump-sum investing a little also. Based on that, and several other studies I've seen and discussions I've had, the general consensus is to invest it all at once, if you have it. I'm with CABob on this one.

Maybe some of the others can provide other research on a comparison of the two methods. Here's a recent thread on other's thoughts about the methods, see:
http://boards.fool.com/Message.asp?mid=15836818&sort=threaded

HTH
Bookm


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