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This is when you invest.

September 4th, 2015 at 09:28 pm

Counter-intuitive, I know. But logical.

We consistently invested (though very tiny, insignificant amounts) dollar-cost averaging through the financial crisis. That turned out to be a great strategy, even though we did not wait for the market to "bottom out" and invested equally on way down and the way up. Later on, we wished we invested more during the crisis.

Now, we are trying to do the same, even if difficult to do emotionally - put whatever money we can scrape up during the month into SP500 and another mutual fund.
$200, $300, $500, $100, etc whenever market has a bad day (running out of money to cover all the bad days).
We have no idea how long it markets be going down, and while it is painful to see the losses continue, I know from looking back on major dips, this is how you get ahead in the span of several years.
So we try to invest what we can now, and when the market is rallying (could be long time from now), we will ease up on investments and do minimum monthly amounts.

Timing is not great - we just got back from a 4 week luxury holiday in the UK and now have to pre-pay whole year of after school care this week, so cashflow is very limited. But we put in what we can.

6 Responses to “This is when you invest. ”

  1. greenleaf Says:
    1441402555

    Couldn't agree more. The market is on sale, time to stock up on quality brands.

  2. VS_ozgirl Says:
    1441404341

    Smart strategy

  3. Another Reader Says:
    1441407700

    CAPE is still too high. I'm expecting a bigger sale after the Fed raises rates.

    Some people made or lost a lot of money on ETF's when the market opened on Black Monday. The ETF's could not find a price and were trading well below NAV for up to 20 minutes after the market opened.

  4. PatientSaver Says:
    1441415348

    I wish I had been paying attention to what the market did today as i would have liked to buy more stock mutual funds. Will make a point to watch the market on Tuesday with intent to buy right before 4 pm is market is still down.

  5. creditcardfree Says:
    1441459954

    This is true. When I worked in customer service for a mutual fund company this is what we told people. Buy low, sell high. We do the dollar cost average method right now.

  6. rob62521 Says:
    1441573018

    Money Magazine and Kiplingers both predicted a "correction" of the stock market this year and apparently this is happening. I know I upped my money into my Roth last week and paid extra hoping to take advantage of the lower stock prices.

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