6 ms·

My (not entirely serious) plan for getting rich: Wait until the economy hits rock bottom and buy cheap stock on a wide range of economies, than forget them unti

My (not entirely serious) plan for getting rich: Wait until the economy hits rock bottom and buy cheap stock on a wide range of economies, than forget them until my SO and i retire (round about 40 years from now), then rediscover our assets, sell and get rich

TheSpiceIsLife 7y ago
~40 years from now: unexpected economic shock. Boom! You failed to time the market.
- creaghpatr 7y ago
  You would hopefully alter your risk profile and adjust your portfolio accordingly ~40 yrs from now. Stocks/index funds are great for the young, gotta diversify into bonds etc later on.
twomoretime 7y ago
You're not going to time the bottom, but you can put a floor on your profits if you assume things will get back to where they were two months ago, and start buying little by little now. Because currently you can find many companies that are at 50% discount already.
- rebuilder 7y ago
  Just don't pick companies that end up going bust.
  - twomoretime 7y ago
    Good point. This is still a highish risk investment, but again if you have faith in the government long term and distribute your investments, you should come out ahead.
JohnJamesRambo 7y ago
>Whether market timing is ever a viable investment strategy is controversial. Some may consider market timing to be a form of gambling based on pure chance, because they do not believe in undervalued or overvalued markets. The efficient-market hypothesis claims that financial prices always exhibit random walk behavior and thus cannot be predicted with consistency. https://en.wikipedia.org/wiki/Market_timing https://en.wikipedia.org/wiki/Market_timing What you are planning seems like a good idea but buying bottoms can be really hard. Lot of info in that wiki article. I like that you are thinking about it though! That already puts you ahead of a lot of the game.
- pmiller2 7y ago
  We can't really say that any individual point in time is "the" bottom, but it's obvious just looking at pricing data that we are at "a" bottom. The S&P 500 is down where it was about 3 years ago, and the Dow is similarly situated. If you buy primarily indices, this drop is a bit like time travelling 3 years in the past to buy. And, it's hard to argue that that's not a better deal than buying, say, in December.
  - v64 7y ago
    > We can't really say that any individual point in time is "the" bottom, but it's obvious just looking at pricing data that we are at "a" bottom. I don't know if we can even say that. It's entirely plausible that the market continues to move down for months or years as the economic reality starts to become clearer. When the actual bottom is put in, March 2020 might look like "the end of the top", not "the start of the bottom".
cbhl 7y ago
If you're in the US, just make sure you sign into your brokerage account once or twice every year, to avoid your stocks going into escheat. Here's an episode of Planet Money which tells the tale of a man who bought some Amazon stock back in the day: (21 min podcast): https://www.npr.org/2020/01/24/799345159/episode-967-escheat-show https://www.npr.org/2020/01/24/799345159/episode-967-escheat... (transcript): https://www.npr.org/transcripts/799345159 https://www.npr.org/transcripts/799345159
twiceaday 7y ago
You will never time the bottom, just dollar-cost-average over like six months. Also, focusing on how to spend the money is the easy, fun part of the 'plan'. What was the plan that ended up with this much cash today?

TheSpiceIsLife 7y ago

~40 years from now: unexpected economic shock. Boom! You failed to time the market.

creaghpatr 7y ago
You would hopefully alter your risk profile and adjust your portfolio accordingly ~40 yrs from now. Stocks/index funds are great for the young, gotta diversify into bonds etc later on.

twomoretime 7y ago

You're not going to time the bottom, but you can put a floor on your profits if you assume things will get back to where they were two months ago, and start buying little by little now. Because currently you can find many companies that are at 50% discount already.

rebuilder 7y ago
Just don't pick companies that end up going bust.
- twomoretime 7y ago
  Good point. This is still a highish risk investment, but again if you have faith in the government long term and distribute your investments, you should come out ahead.

JohnJamesRambo 7y ago

>Whether market timing is ever a viable investment strategy is controversial. Some may consider market timing to be a form of gambling based on pure chance, because they do not believe in undervalued or overvalued markets. The efficient-market hypothesis claims that financial prices always exhibit random walk behavior and thus cannot be predicted with consistency. https://en.wikipedia.org/wiki/Market_timing https://en.wikipedia.org/wiki/Market_timing What you are planning seems like a good idea but buying bottoms can be really hard. Lot of info in that wiki article. I like that you are thinking about it though! That already puts you ahead of a lot of the game.

pmiller2 7y ago
We can't really say that any individual point in time is "the" bottom, but it's obvious just looking at pricing data that we are at "a" bottom. The S&P 500 is down where it was about 3 years ago, and the Dow is similarly situated. If you buy primarily indices, this drop is a bit like time travelling 3 years in the past to buy. And, it's hard to argue that that's not a better deal than buying, say, in December.
- v64 7y ago
  > We can't really say that any individual point in time is "the" bottom, but it's obvious just looking at pricing data that we are at "a" bottom. I don't know if we can even say that. It's entirely plausible that the market continues to move down for months or years as the economic reality starts to become clearer. When the actual bottom is put in, March 2020 might look like "the end of the top", not "the start of the bottom".

cbhl 7y ago

If you're in the US, just make sure you sign into your brokerage account once or twice every year, to avoid your stocks going into escheat. Here's an episode of Planet Money which tells the tale of a man who bought some Amazon stock back in the day: (21 min podcast): https://www.npr.org/2020/01/24/799345159/episode-967-escheat-show https://www.npr.org/2020/01/24/799345159/episode-967-escheat... (transcript): https://www.npr.org/transcripts/799345159 https://www.npr.org/transcripts/799345159

twiceaday 7y ago

You will never time the bottom, just dollar-cost-average over like six months. Also, focusing on how to spend the money is the easy, fun part of the 'plan'. What was the plan that ended up with this much cash today?