4 ms·

Why would you invest just before a recession? Keep your cash and invest when the market is down.

by Flavius 8y ago

rohit2412 8y ago
So bonds, or money market funds
bytematic 8y ago
There are some indexes that go up on market volatility, as well as some "reverse" indexes
- docker_up 8y ago
  Those are meant for day-trading and now for long-term or even medium term investment.
alttab 8y ago
You should always be investing because timing the market is a fools errand. The question is how much?
- rohit2412 8y ago
  Isn't that timing too? Or it is wise when you allocate 5/95 split to stock/bond but fool's errand when it is 0/100
  - alttab 8y ago
    Consistently invest an amount that you are comfortable with. It's called dollar cost averaging. I'd personally keep dry powder for when the market is far beyond the standard deviation of historical records. 2008 and 2018 would both be years this is true. Shorting though is only for the brave or stupid. Personally, I put a certain amount in every quarter.
techopoly 8y ago
This is true, however, how does one know when the market is down? It's down now. But maybe it's falling much further and you're catching the falling knife? Maybe it starts a 5-year boom tomorrow and you've missed your chance? I guess that extends the thought expressed in other comments that no one really knows when a recession is about to hit. If they did, it would be preventable. A good investor knows his risk and his time horizons. Obviously, don't throw thousands into the stock market just before you're about to retire, even if the market looks to be down, if you don't have a very sizable nest egg. Additionally, a good investment should be a good investment even during the hard times -- for instance, I don't think Amazon is going anywhere for a while. Otherwise you're speculating, which is a valid form of investing, but you can't ignore the risk, i.e. you have to have cash and assets that will protect you if you lose all your money or the apocalypse happens. It's complex. I'm not saying I'm a good investor, but I am trying to learn from the past!

Why would you invest just before a recession? Keep your cash and invest when the market is down.

rohit2412 8y ago

So bonds, or money market funds

bytematic 8y ago

There are some indexes that go up on market volatility, as well as some "reverse" indexes

docker_up 8y ago
Those are meant for day-trading and now for long-term or even medium term investment.

alttab 8y ago

You should always be investing because timing the market is a fools errand. The question is how much?

rohit2412 8y ago
Isn't that timing too? Or it is wise when you allocate 5/95 split to stock/bond but fool's errand when it is 0/100
- alttab 8y ago
  Consistently invest an amount that you are comfortable with. It's called dollar cost averaging. I'd personally keep dry powder for when the market is far beyond the standard deviation of historical records. 2008 and 2018 would both be years this is true. Shorting though is only for the brave or stupid. Personally, I put a certain amount in every quarter.

techopoly 8y ago

This is true, however, how does one know when the market is down? It's down now. But maybe it's falling much further and you're catching the falling knife? Maybe it starts a 5-year boom tomorrow and you've missed your chance? I guess that extends the thought expressed in other comments that no one really knows when a recession is about to hit. If they did, it would be preventable. A good investor knows his risk and his time horizons. Obviously, don't throw thousands into the stock market just before you're about to retire, even if the market looks to be down, if you don't have a very sizable nest egg. Additionally, a good investment should be a good investment even during the hard times -- for instance, I don't think Amazon is going anywhere for a while. Otherwise you're speculating, which is a valid form of investing, but you can't ignore the risk, i.e. you have to have cash and assets that will protect you if you lose all your money or the apocalypse happens. It's complex. I'm not saying I'm a good investor, but I am trying to learn from the past!