I’m selling my vacation home. What should I do with the $200K profit?

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Q. I’m closing on the sale of a vacation home and I will net about $200,000. I’m set with retirement income so I want to invest this for my children’s inheritance. With the market where it is, I’m not sure putting it all in stocks now is smart. What should I do?
— Seller

A. Congratulations on the sale of your home.

The housing market may be starting to slow with higher interest rates, but we’re glad to hear you were able to sell with a profit.

As you suggested, the stock market is a volatile place right now.

In terms of how or when to invest, we’re glad you’ve already set a goal for the money. That’s something everyone should do before investing.

The adage is not to time the market, but to have time in the market, and this will determine how you do with growth, said Bill Connington of Connington Wealth Management in Paramus.

You didn’t say how old your children are or how old you are, and that should come into play before you make a decision.

Assuming that you’re taking a long-term view, a diversified portfolio would be a good bet, Connington said.

“Considering your concern with market conditions, dollar cost averaging into the market each month would help to reduce risk and yet begin the process of working towards growing this nest egg for your kids’ inheritance,” he said.

That way you won’t have to worry about where the market is at any given time, but instead, you will steadily add funds, sometimes buying higher and sometimes buying lower. It will stop you from having to worry about buying in at the wrong time, and if you plan for the money to stay invested for the long-term, it’s a good way to go.

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This story was originally published on Aug. 8, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.