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You're making the assumption that someone just put all their money into the market at once. People use dollar cost averaging and add money to the market every w

You're making the assumption that someone just put all their money into the market at once. People use dollar cost averaging and add money to the market every week or month. So if you put all your money in at the top, yes you;d not be doing so well. But more likely you put money in before, during and after that event and today you'd be well up when you consider dividends and appreciation. Also, you'd want to diversify outside of a single market, like Japan stocks. You'd want to be diversified across bonds, stocks, real estate, currencies, precious metals, commodities, etc. This is so easy and inexpensive to do today for the average person. Dollar cost averaging across a broad spectrum of investment instruments over a long period of time is better than holding cash.

paganel 9y ago
> You'd want to be diversified across bonds, stocks, real estate, currencies, precious metals, commodities, etc. This is so easy and inexpensive to do today for the average person. I mostly agree with you, my question was addressing the "invest in ETFs and forget about it" part that OP was talking about (the "robo-ETF company"). What you're proposing sounds more like active investing, which of course will be one of the few viable options once a global crisis re-emerges.
- kspaans 9y ago
  Dollar-cost-averaging and diversifying your portfolio are orthogonal to active/passive investing. (Though arguably DCA is a bit more on the passive side, as it avoids trying to time the market.)
  - warrenm 9y ago
    DCA and diversification are more-or-less the bread-and-butter of routine buy-ins to ETFs, MFs, etc You rely on the fund to be diversified within its target sectors, and you diversify by picking multiple different funds across different sectors.
    - nemo44x 9y ago
      Exactaly right. And in part of the DCA strategy as you described I also DCA into a cash fund (liquidity fund) that can be used at a time I judge opportune. That is if there's a housing crash, I'll have a hard asset I can use to jump into that opportunity. Of if there's a market correction or crash, I'd be able to use a portion of that cash to buy low. It's not quite timing the market because the portion going into cash is scaled accordingly to how much is going into other types of funds and also has the benefit of being used if there's an emergency that requires a decent amount of liquidity. Having it all in liquidity would be a poor choice. Cash should only be a part of the overall strategy.
- mattferderer 9y ago
  The 2 robo-ETF companies mentioned basically have you set a risk tolerance level & then invest in a diverse selection of ETFs on your behalf. The company's job is to keep your investment balanced based off the risk tolerance level you suggested. So a risk tolerance level of 5 might mean your investment should have 30% of it in bonds. If your portfolio ever moves to 31% bonds it will re-adjust by selling some of your bonds ETF. Hence my comment about "invest in ETFs and forget about it". I believe the above mentioned companies also offer non-ETF investments for customers with over 100K. In this case instead of putting your money into an ETF, they basically buy the individual stocks that the ETF would have been tracking.

paganel 9y ago

> You'd want to be diversified across bonds, stocks, real estate, currencies, precious metals, commodities, etc. This is so easy and inexpensive to do today for the average person. I mostly agree with you, my question was addressing the "invest in ETFs and forget about it" part that OP was talking about (the "robo-ETF company"). What you're proposing sounds more like active investing, which of course will be one of the few viable options once a global crisis re-emerges.

kspaans 9y ago
Dollar-cost-averaging and diversifying your portfolio are orthogonal to active/passive investing. (Though arguably DCA is a bit more on the passive side, as it avoids trying to time the market.)
- warrenm 9y ago
  DCA and diversification are more-or-less the bread-and-butter of routine buy-ins to ETFs, MFs, etc You rely on the fund to be diversified within its target sectors, and you diversify by picking multiple different funds across different sectors.
  - nemo44x 9y ago
    Exactaly right. And in part of the DCA strategy as you described I also DCA into a cash fund (liquidity fund) that can be used at a time I judge opportune. That is if there's a housing crash, I'll have a hard asset I can use to jump into that opportunity. Of if there's a market correction or crash, I'd be able to use a portion of that cash to buy low. It's not quite timing the market because the portion going into cash is scaled accordingly to how much is going into other types of funds and also has the benefit of being used if there's an emergency that requires a decent amount of liquidity. Having it all in liquidity would be a poor choice. Cash should only be a part of the overall strategy.
mattferderer 9y ago
The 2 robo-ETF companies mentioned basically have you set a risk tolerance level & then invest in a diverse selection of ETFs on your behalf. The company's job is to keep your investment balanced based off the risk tolerance level you suggested. So a risk tolerance level of 5 might mean your investment should have 30% of it in bonds. If your portfolio ever moves to 31% bonds it will re-adjust by selling some of your bonds ETF. Hence my comment about "invest in ETFs and forget about it". I believe the above mentioned companies also offer non-ETF investments for customers with over 100K. In this case instead of putting your money into an ETF, they basically buy the individual stocks that the ETF would have been tracking.