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My advice would be to echo those who suggest index funds or target retirement funds. BUT: there's reason to believe that the stock markets are currently near p
by cimmanom 9y ago
My advice would be to echo those who suggest index funds or target retirement funds.
BUT: there's reason to believe that the stock markets are currently near peak. Instead of investing all your money at once, you may want to do something called "dollar cost averaging", where you spread out your investment by putting a bit into the market every month for years. That way you get some of the benefit from a market that continues to rise in the short term but don't lose your shirt if it crashes hard three months from now.
- stouset 9y agoThere are always reasons to believe the market is at its peak and you should hold off. Time in the market beats timing the market. DCA is also worse than time in the market. http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ http://awealthofcommonsense.com/2014/02/worlds-worst-market-...
- weltstub 9y agoThe link you provide says DCA would have been a better strategy. Doesn't mean it's the optimal strategy, but the link subverts your point.
- stouset 9y agoThe point of the link was that even having the actual worst market timing, you’re still doing great. So stop worrying and just put your money in. If you plan on investing large lump sums repeatedly and exclusively at market peaks, then yes, DCA will be a better strategy. But this is just as unlikely as you being a financial genius who only ever invests lump sums at market lows. Actually, given the upward trend line of the market, it’s slightly less likely.