For a long time, I believed the crash was coming. I had the opportunity to start investing in the stock market in 2012 but i didn't. I kept hoarding cash. Now I think back and I feel like an idiot. I could've made a $1m+ net worth today if I had invested my savings in S&P500. I want to fix it now. But at the same time I fear jumping in at the worst possible moment. The stock market is at an all time high right now. Should I just close my eyes and jump all in? Do dollar cost averaging over few months? #personalfinance #investments #crash
You'll be right right about a crash.... Eventually...
Exactly
Crash did happen in March
Best time to put your money in the market is always today
Best time was 20 years ago. Next best is today.
Next best was 19 years ago.
Market timing is also important, not just time in the market. For the skeptics there are some papers on the return over the next 10 years based on the average pe at the time you buy. My advice, dollar cost average very slowly. There is still some value in sectors like energy. Think of what sector is going to be ok over the next 10 years and preferably not popular right now. When the next crash happens (at least I've ever 10 years), go all in. Until then learn and enjoy the stock market.
Trying to time the market / waiting for the next crash is not a great move. By the time the next crash happens, it’ll probably bring the market to a price still higher than when you first started timing the market / waiting for the crash
Not saying sit on a fortune for ten years waiting for a crash because you will get killed by inflation. What I am saying is market timing is important. And people who preach time in the market like a religion are simplifying things to the extent they are wrong. You should always be in the market to some extent. In the case of OP they are starting with a lot of cash. My view is going all in at an all time high is not smart (though there are plenty of reasons why it could keep going up, and note I am all in, but, I went from small holdings to all in in Feb/Mach/Apr this year and plan to hold until life changes). Thus my advice is to dollar cost average, move slow and learn to feel and enjoy the stock market. Also to think long term about your investments, not because motley fool tells you this "stock is amazing".
Are you me? Lol. I reduced my cash from 60% to 20% after Fed decided to cut rates back in March. DCAed twice a month. I was hoarding cash too, and in the week of 30% crash when SPY reached 220 I happened to be on vacation. I did not bother investing on the phone thinking these bear markets last for a while, let things stabilize a bit. But Fed cut rates too aggressively. By the time I got home in front of my laptop, SPY was almost back to baseline. Learnt my lesson. Never trying to time the market again. Lost more gains waiting for the crash than I would have lost in the crash itself. Second, even when there is a crash you cannot know if its the bottom.
whenever i am unsure, i.e. 50-50, or 25-75. i ensure my action reflects that and not simply no-action, because that's 0-100. it worked out for me during the crash because i keep halving the amount to invest until i am comfortable. so now i have some gain instead of none.
Fibm6, well said!
Never too late to jump in. Save for some crazy world event that tanks us for years, there's always money to be made over time.
LOL at you engineers thinking the market is a science or smth and “Timing the market”.. You will see over time the market is like a dude with mood swings and all your guesses on timing is a monkey throwing at a dartboard. Hedgefunds pay people millions and can’t time the market, you and me can’t either. Just put money in over time and you’ll realize in the long run you made much more than trying to do something impossible
Well said
But I'm smarter than the people at the hedge funds. If they were any good they'd start there own fund....
Never time the market... lol and best time to invest is always yesterday, aka you should just put your funds into either VOO or FXAIX and forget about it for like 10-20 years. You will come out as a winner
Except when yesterday was the day before big crash.
Stocks only go up , always buy the dip son
"Buying the dip" means timing the market, which you shouldn't do. You should always be buying.
I had the same issue (I just started working full time like 2 ago though) so I have some run way to ride out the dips - you can’t time the market and value investing is VERY HARD. I mean warren buffet does but let’s face it, most average people can’t... which I consider myself to be. Dollar cost averaging also doesn’t make sense, what if at the contribution of your last dollar, the market tanks? You’ll never know. The best option for me (that I’ve researched) is to keep my investments in high growth ETFs and Index funds and ride out the dips. But I have a few years before I need to pull out the cash but idk if that’s your situation too
Time in the market is the most important factor. Just start dollar cost averaging into the S&P500, QQQ, or VTI. Any small downturn in the next couple months will be insignificant after a couple years dollar cost averaging. With enough time you'll pretty much always make money.
I'm planning to follow Dave Ramsey's strategy. Invest in mutual funds with the following split: 25% growth and income 25% growth 25% aggressive growth 25% international
I'll suggest stay away from mutual funds.. considering the high costs, you'll never beat the market in the long run