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If you use Dollar Cost Averaging[1] there is no such thing as a good or bad time to buy ETFs. As long as the market goes up on average, which is has done throug
by robjan 7y ago
If you use Dollar Cost Averaging[1] there is no such thing as a good or bad time to buy ETFs. As long as the market goes up on average, which is has done throughout history, then you will win over a sufficiently long horizon. A popular phrase is "It's not about timing the market, but time in the market".
Make sure you research your ETFs and what they are tracking e.g most of the Vanguard ETFs (e.g. VOO, VTI, BND) are quite reliable but if you are investing (and not day trading) avoid leveraged and inverse/short ETFs such as SPXU and TQQQ. They may seem attractive now but they are based on derivative products so their pricing is subject to a number of factors.
[1]: https://en.wikipedia.org/wiki/Dollar_cost_averaging https://en.wikipedia.org/wiki/Dollar_cost_averaging
- xnx 7y agoDollar cost averaging seems to be more of a psychological strategy than a financial one: https://en.wikipedia.org/wiki/Dollar_cost_averaging#Criticism https://en.wikipedia.org/wiki/Dollar_cost_averaging#Criticis...
- throw0101a 7y agoPutting away a little every month generally gives the best results as the main alternative is 'buying the dip', and good luck with that: * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
- robjan 7y agoIt is, but DCA helps people who think "now everything is on discount, let's buy more" when the market could easily continue to fall.
- kojeovo 7y agoWell it's also a good low effort strategy. I'm at work most of the time markets are open and I don't have to stay that up to date.
- techthumb 7y ago+1 for dollar cost averaging if your funds are also coming in on a schedule (per paycheck). However, if one had a million dollars sitting in the bank, it may not be prudent to dollar cost average. Portfolio management and a time horizon are necessary to achieve the desired mix