Rollover and Conversion to Roth IRA Completed; New Milestone Reached

A few weeks ago I posted an update about rolling over the money from two retirement plans held with my former employer into an IRA, then converting that into my existing Roth IRA. I am pleased to report that the entire process has now been completed. As a result, I added a little over $25,000 to my Roth IRA, more than tripling its size. Note that I already set aside sufficient external money for the estimated taxes on the conversion, which I will be paying soon.

In the meantime, I now find myself in the unusual position of having over 20% of my overall portfolio in cash. Even though I am eager to put the rollover money to work, I do not see much in the way of attractively valued dividend growth stocks at the moment. The value investor inside of me cringes at the thought of buying overvalued stocks simply because I have money to invest. For that reason, I will not be investing the money all at once. However, I will not attempt to time the market, either.

I have decided that a reasonable course of action is to invest the money at regular intervals in whichever stocks happen to be fairly valued or undervalued at the time. With over $25,000 at my disposal, my tentative approach will be to make two purchases per month over the next five or six months, with each purchase being in the range of $2,000 to $2,500. The only constraint is that a stock has to be either fairly valued or undervalued by my judgment in order to be purchased. If the market happens to take a sudden downturn and more than two opportunities become available in a month, then I would accelerate the purchasing schedule.

Note that these purchases will all occur in my Roth IRA. Let's not forget that I will also be contributing new capital to my taxable account on a monthly basis (I have not made my November contribution yet). The amount will vary a bit from month to month, but it will likely average over $2,000. Thus, I will have sufficient cash to make a third (and possibly a fourth) purchase every month.

That's the plan as it currently stands. Incidentally, thanks to the rollover money, my portfolio reached a new milestone today, closing above $125,000 for the very first time ($125,862.52). Continuing with $25,000 increments, the next milestone will be $150,000.

Milestone history for portfolio value:

• $125,000: November 2013
• $100,000: October 2013
• $90,000: August 2013
• $80,000: March 2013
• $70,000: January 2013
• $60,000: September 2012
• $50,000: March 2012