4 ms·
It boggles my mind that so many people are complacent with wanting a return close to the average. If the average is negative then is that a good thing? No. P
by ct 17y ago
It boggles my mind that so many people are complacent with wanting a return close to the average. If the average is negative then is that a good thing? No. People think the market will always go up -- but for the limited data that the stock market has been open there's less than 100 data points (years) to say with a 98% confidence level that the market will always go up.
If you've been averaging starting at the top of 2000 and putting the same amount of money in each month you'd be losing money right now 10 years later. You can say well I'm not retiring in 10 yrs and would be saving for 40 yrs. But that's 20% of the time which is a lost time opportunity of a decade.
- Retric 17y agoThe secret of dollar cost averaging is vary simple it let's you buy into the market at below the average price. That big dip at the start of 09 made a lot of money for any using dollar cost averaging not so much for people who where already in the market. As to average returns, investing is not going to make you rich, if you plod along for 35 years you can comfortably retire which is not a bad thing. If you want to get rich you need to do something else, on the other hand if you are rich maintaining that wealth is more valuable than significantly increasing it.