Quote:
Originally Posted by Peter_Spaeth
And by holding, or just investing at regular intervals not trying to time, I did much better. See my example. You cannot know if it's generally low in real time. It looks low today relative to 35K, but if it drops 5K, then it was in fact relatively high. I agree with WHAT you are buying, but I maintain just buying in at regular intervals in the long run is likely going to bet better than active management on timing.
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We don't know where it will be in 3 months, but when the market is setting records and has already skyrocketed recently, it's not a good time to buy blue chips and index funds.
When the market has fallen 20-25%, your risk floor is way, way lower, especially factoring in the absolute risk floor. It's a much better time to buy. The market is not good right now and prices are way lower. Makes more sense to buy now than when it is setting records.
Of course, like I have said, it may be a better time to buy in 3, 6, 9, or 12 months from now. You can't time absolute lows or peaks beyond luck. But you can choose to buy when things are high or low. By buying this year instead of last year, that money is at 0% instead of -20%. All I'm gambling on when timing it, really, is that when in a new record high market, there will be a lower buying point in the future and I will just wait until it's lower. The odds of this strategy biting me in the rear are incredibly low. My gamble is simply that we will have periods of highs and lows and it is smarter to buy long holds during the lows, which the entire history of the market bears out.