didn't you say... wrote:
Klondike55 wrote:If this goes on another week, time to bail.
I thought June 2013 was the time to bail.
RIGHT!
This thread should stand for all eternity as THE example of the most absolutely wrong call ever here on anything. It's embarrassing at this point really.
Dude left the market in June 2013. Damn! We are closing in on one whole year. Most people only actively (meaning they put money IN the market) for 30 years, so this guy will miss out on 1/30th of that.
Of course he was calling for a Dow of sub 13,000.
Trying to time the market like he says he does is asinine.
I currently do a little more than 20% of my income into investments of some sort...mostly stocks within mutual funds. That's a lot that I've put in since June 2013, and it's money that will grow (and has grown).
So, he pulls out of when the Dow is at 15,000, the Dow then goes all the way up to 16,632 and has now settled down to 16,105 as of this minute. At this point, if there IS a big drop where the Dow gets below 15,000 (and that for sure COULD happen; I'm not saying it can't), he would somehow say he was right or would claim victory in some way? Missing out on what would likely be a year or more of investing?
The thing is that after big drops typically come BIG returns...that's why 2009 and 2010 were so great.
So, that way it has worked for me is that I was in the market in June 2013 when the Dow was at 15,000, and I continued to put money in while ALL of my money not only gained due to growth, but also due to reinvested dividends. I own a certain number of shares today which is MORE than I owned in 2013, so if the Dow shrinks back down to 15,000 or below, I STILL own those shares, I will continue to buy stocks, and then when it goes UP again (and it will), what I'm holding will swell (that's what she said).
The reality is that if the Dow goes down to 15,000, we will think of that as 'low'. Back in summer 2013, that was 'high'. Well, from a LOW point, you then go back UP.
It is STILL best to invest based on these factors:
1) Do you have money to invest? If you are up to your eyeballs in debt, then no you don't. Get rid of that debt so that you have freed up some income and so you stop wasting money on interest.
2) How close are you to retirement? Further away, and you can just keep putting money in with really no fear. If you have more than 5 years before retirement, you could weather a bad downturn.
Those are the two big factors. You don't invest based on where the market is.
Get and stay debt free.
Have 3-6 months of expenses in liquid emergency fund.
Invest 15% or more into retirement accounts made up mostly of stocks within mutual funds.
Put money in. Put money in. Put money in, and don't stop or change the aggressiveness of it until you are within 5 years of retirement (want to have a FEW bonds in there after age 35, then that's fine, but I wouldn't do more than 20% in bonds until you are within 5 years of retirement).
IF you don't like bonds (and I am increasingly in that boat) then you COULD decide to be ALL in stocks even in retirement. IF you do that, you should either have a very good source of income from another source OR up to 3 YEARS of expenses that is not invested in stocks (CDs, MMA, or cash). This is ONLY to weather the storm of a bad market downturn.