On 09 October 2007, the Dow Jones Industrials hit a record high, closing at 14,279. What a difference a year makes: Last Friday, the Dow closed at 8451, and there's a good chance it will drop even further.
Unsurprisingly, my inbox is filled with e-mail from people who wonder what they should do. Here are some typical questions from readers like you:
- “Originally we had planned to open Roth IRAs this weekend, but with the stock market being so unreasonable, we have lost our confidence. Wouldn't it be wiser to leave the money in our savings accounts for several more months?“
- “I am 30 years old and since reading your blog, I realize how important it is to get a Roth IRA fired up. However, now that I'm financially ready, the market meltdown has confused me completely. Should I hold tight and just keep saving while I see how this rides out?“
- “I have two 401k plans. However, the last time I looked at my quarterly reports, I noticed I am losing money. I know that the US economy has been pretty bad lately, but is there anything that can be done or planned for?“
These are fantastic questions. Unfortunately, there are no fantastic answers. Nobody knows what the market will do. Nobody.
I watched a news program today in which a pundit predicted the market has hit bottom and is ready to make a recovery. But there are others who believe stocks will continue to fall. I am by nature an optimistic guy, but even I start to feel gloomy and scared for the future when I read and hear some of this stuff. (Peter Schiff, especially.)
Unfortunately, neither I nor anyone else can tell you whether now is a good time for you to invest in the stock market. Only you can make that decision. I can, however, suggest four fundamentals to help guide your thinking.
Know your risk tolerance
The first thing you should do before you invest — now or at any other time — is to gauge your risk tolerance. When you buy stocks, there is always an element of risk, the chance that the value of your investment will fall.
Some investors can tolerate more risk than others. I used to believe I could stomach a lot of risk. I thought I was bold and aggressive. Then I made a couple of dumb investments, culminating with the loss of my entire 2007 Roth IRA contribution when The Sharper Image went bankrupt.
I've learned that I don't actually have a high risk tolerance. I've funneled all of my money into index funds, mutual funds that track the broad movement of the market. These still contain an element of risk — the “broad movement of the market” has caused my index fund to drop 17.3% over the past two weeks! — but it's risk I can tolerate. I know that my investment is doing no worse than the market as a whole.
There are several online tools that can help you assess your own risk tolerance:
- Rutgers investment risk tolerance quiz
- MSN Money risk tolerance quiz (and an article on the subject)
- Kiplinger: Test your risk tolerance
If your risk tolerance is high, you can put more money into stocks. If your risk tolerance is very low, the stock market may not be right for you. Remember, a more risky type of stock has greater potential for gain as well as greater potential for loss. Lower risk stocks have smaller swings over the long term. If your investments are geared toward retirement, you should lower the overall risk level of your portfolio as you age.
Set investment goals
It's important to know why you're investing. What is your purpose? What are your goals? Do you need the money in a few years, or do you still have 40 years before you'll need to draw upon it? Are you looking for the maximum possible growth? Or do you simply want to protect your capital — to not lose money?
- The stock market is not the right place for short-term investments, or for those who cannot afford to lose capital. If you're saving for next year's vacation, you're better off putting your money into a high-yield savings account or a certificate of deposit.
- Are you saving for a medium-term goal, like a down payment for a house? Again, the stock market is probably too risky for holding this money.
- But if your investment horizon is long-term, if you're saving for retirement in 15, 20, or 30 years, then the stock market's historical performance makes it an attractive option, especially when it's down 43% from its peak.
That's not to say that the stock market is always the best choice, even for long-term investments. Coupled with your risk tolerance, your investment goals can help you determine the proper asset allocation — the best way to divide your money among possible investments.
Diversify
Diversification is one of the cornerstones of Modern Portfolio Theory. Though it seems counter-intuitive, research indicates that owning investments of different types offers higher returns at lower risk. Diversification is simply the practice of owning many investments, of not putting all your eggs in one basket.
There are several ways to approach diversification, including:
- Diversification among stocks — When you own a single stock (or a handful of stocks), you are subject to a lot of risk. But when you own a mutual fund — a collection of stocks — you are practicing diversification, spreading the risk among many securities.
- Diversification among asset classes — Only the most risk-tolerant investors place all of their money in the stock market. Most spread it around into other “asset classes”. For example, I have my retirement in stocks, but I also have an emergency fund (in cash), and am accelerating my mortgage payments (real estate). I have friends who have diversified into precious metals, such as gold and silver.
- Diversification over time — Some investors practice dollar-cost averaging as a means to mitigate risk. This can be an excellent way to invest in the market if you're nervous about putting all of your money in at once. (Please note that dollar-cost averaging has critics with valid points.)
This asset allocation wizard from CNN Money poses a few basic questions about your goals and your risk tolerance to determine a framework for diversifying your investments. I told it that I needed my money in 20+ years, could handle some risk, was okay missing my target by a couple years, and view market sell-offs as a time to buy more stocks. The calculator's recommendation? Almost exactly the same asset allocation as FFNOX, the index fund I've selected for my 401k.
Diversification can't prevent stock market losses, but it can certainly reduce them. (Note that it also reduces market gains, however.)
Educate yourself
The final fundamental concept is also the most important. I believe that education is the most essential component of any investment plan.
Often, fear is a product of ignorance. When we don't understand something, it scares us. But ignorance can be overcome through education. If the market meltdown makes you anxious, I urge you to do some research. Visit my collection of financial literacy resources and watch the video series about saving and investing. Go to the library and borrow one of these books:
- The Four Pillars of Investing [my review]
- The Random Walk Guide to Investing [my review]
- The Only Investment Guide You'll Ever Need
- Why Smart People Make Big Money Mistakes (and How to Correct Them) [my review]
I wish I could make all new investors set aside a few hours to read The Four Pillars of Investing. There's a good chance it won't make today's investors any less nervous, but at least they'll have a basis for making informed decisions.
Investing in real life
In The Only Investment Guide You'll Ever Need, Andrew Tobias writes, “Buy low and sell high. You laugh. Yet most people, particularly small investors, shun the market when it's getting drubbed…It's precisely when the market looks worst that the opportunities are best.”
We all know this, but although the market is currently getting drubbed, the average person isn't buying. The average person is panicked. The average person is selling. Friday's edition of Marketplace featured some shocking stats. Last week, investors pulled $43 billion out of mutual funds. Two weeks ago, that number was $6 billion. The week before that it was only $5 billion. Why is the market dropping? One reason is that the average investor has panicked.
If the average person is selling, then who's buying? Who's crazy enough to buy when everyone else wants out of the market? I asked some of my colleagues about their recent money moves. Here's what they said:
- Trent from The Simple Dollar recently maxed out his Roth IRA for 2008 (placing the money in Vanguard's Target Retirement 2045 fund)
- Nickel moved some money into a Total Stock Market Index fund last Friday.
- Jeremy from Gen X Finance told me: “Buying opportunities like this don't come around that often, so my only regret is that I don't have a lot of free cash on hand so that I can pick up a lot of beaten down individual stocks.”
- Ryan from Cash Money Life says: “I plan on opening a self-employed retirement account soon with my web income, and will probably also put more money in equities where I can. I've been hoarding cash for several months and I think it is a great buying opportunity right now. I've got 30 years before I reach retirement age.”
- Blunt Money writes: “I'm continuing automatic investments as well, although I did allocate a portion of new money for those to a fixed income fund. I also put additional money into single stocks.”
- JLP at All Financial Matters, a financial planner by trade, writes that for a long-term investor, the current market is a gigantic sale.
What about me? I recently took as much money as I could it and pumped it into FFNOX. I bought in at $24.20. Its current value is $20.01. It's down 17.31% since I bought it. So what? If I had bought it a year ago, I would have paid $32.71. If I get a chance to buy more FFNOX in the next few months, I will. Yes, it's scary to buy as the market is falling, but I know that I'm purchasing a broad-based diversified index fund. Also — and this is key — I believe that the market will turn around.
Now maybe all of us personal finance bloggers have been drinking the same Kool-Aid. Maybe we're suffering from mass delusion. If so, we're not the only ones. Warren Buffett, the world's richest man, is on a buying spree. So are Mark Cuban and many others.
But you don't care about all those other people, do you? You care about yourself and your money. Rightfully so. What should you do? You are the only one who can make that call. You are the only one who knows your own risk tolerance, your investment horizon, and your savings goals. Educate yourself about investing, and then make decisions based on your own objectives and your own assessment of the market.
If you're still uncertain, seek professional advice. Find a fee-based financial advisor to help guide your decisions.
Conclusion
In Benjamin Graham's classic The Intelligent Investor, he writes:
The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored. He should never buy a stock because it has gone up or sell one because it has gone down. He would not be far wrong if this motto read more simply: “Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.”
If you believe stock prices are still high, then steer clear of the market. If you think they're low, then buy. And remember: Unless you sell your stocks, you haven't lost anything at this point — it's all on paper.
During the tech bubble, I was part of an investment club. The other guys and I chortled with glee as we bought tech stocks (Celera Genomics, Home Grocer, Triquint Semiconductor) near the top of the market. We thought we were going to be rich. We weren't laughing so hard when the bubble popped; we closed the club and sold the stocks at huge losses. What lesson did I learn? The time to buy is when prices are low, not when they're high.
I believe that for the average long-term investor, the best course of action right now is to make regular scheduled purchases of low-cost diversified index funds. That's what I've done, and that's what I intend to keep doing.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.
I think that from a psychological point of view, dollar cost averaging is the way to go. We have some cash to invest and we’re going to spread it out a bit. That way at least some of the purchases will be at “the bottom” and we can feel good about it.
Reading Four Pillars and Random Walk etc is an excellent suggestion – the more knowledge you have about how the markets work and particularly past history, the better off you will be in rough times.
I agree with JD, no one can tell you whether now is a good time to invest for you. Age, risk tolerance, long term vs. short term investing, your overall financial health (i.e. do you have a ton of credit card debt, etc.) all need to be considered before investing. We continue to invest in our 401k and we recently started funding our 2008 IRAs. We use our IRAs to buy stock and for us now is a good time to buy stock in good undervalued companies. We have all our debt paid off, except our mortgage, we have an… Read more »
I’m in a similar quandary–I just lost my job and I’m not sure if I should roll over my 401k now, or wait a while.
I am 23 and do not see this as a “financial crisis” for me at all. I have been referring to it as the “financial opportunity” instead. The analogy that I have been telling all of my friends and family is that right now is “The-Day-After-Thanksgiving-Sale” for investing. At my age, even if I buy and the market continues to fall it eventually will turn itself around. What I don’t want to do is miss this low buying price opportunity. One might ask why I don’t just wait to buy at the lowest price. If I knew what the lowest… Read more »
I think at lot of this depends on your timeframe. I have 40 years until I want to take the money out. Do people honestly think that the market will continue to decline over that timeframe?
It does illustrate to me that those with a shorter timeframe need to be more cautious, and that will be me one day.
I think it’s worth pointing out that whether to invest in the stock market is a different question altogether from whether to open up a ROTH IRA (or other retirement vehicle). If your risk tolerance is low, you can put all or some of your money in a CD or bond fund through your IRA. It’s actually quite tax efficient to do so. I have a good portion of my IRA in Vanguard’s Total Bond Market Index Fund, and I’m getting fairly stable appreciation (with interest reinvested) without having to pay taxes on the interest, which I believe — though… Read more »
Excellent, excellent point Ada. Thank you.
Unless your retiring tomorrow there is no need to worry- and if you do decide to panic your only “locking” in your losses. Watch what the big boys are doing right now like Warren Buffet. They are buying, and unless you’ve got bills to pay off and are in great debt you should do the same.
Christine Groth
http://www.101WaystoMagnetizeMoney.com
JD – Thank you so much for all of the work you do here. Having procrastinated about funding my SEP IRA-(who could blame me?-it’s at WAMU Investments,INC)- The October 15th tax filing deadline approaches. I have been paralyzed about what to do having paid my taxes based on my commitment to contribute a certain large (to me) figure. I am having a free consultation this morning with a financial firm. I am concerned about opening another SEP with Vanguard, Fidelity or American Century Funds. Can I open another SEP? There will be a fee to move the money out of… Read more »
I have a similar question, but not so much because I’m worried about investing. By April, my husband and I will have close to three months of living expenses in our emergency fund, BUT, since he’s 32 (I’m 27) and neither of us have money in a retirement fund, should we fund his for this year and then build the emergency fund back up? We had planned to start maxing out our IRAs after the emergency fund was complete, but I wonder, considering our age (esp. his) if it wouldn’t be better to get some money into an IRA THIS… Read more »
I just came over to say basically what Ada said, so I agree with that point! If you really can’t stomach the market right now, don’t use that as an excuse to miss out on a year of your annual IRA max. Even if you put the money into a CD within an IRA, anything you earn will be tax advantaged one way or the other. Personally, I have continued to invest. I feel fine about our household asset allocation. I actually do not buy into the concept of holding only one or two index funds, and I have made… Read more »
Choosing to invest because stocks have gone up, gone down, or gone flat is not a reason to invest. It’s a reason to gamble.
Coming up with an investment strategy and choosing to implement it regardless of market swings is investing.
My two cents.
I just recently became eligible to contribute to a 401K. I actually think I’m quite lucky to be investing in a down market. I have had panic moments because I don’t know what I am doing – I’m not a professional. I’ve been investing in managed index funds and trying to hold onto my stomach.
I did cut back slightly on my contribution rate, but that’s because I need more cash on hand for a new car purchase soon.
I had an interesting conversation with my 93-year-old grandfather last night. After a lifetime of teaching (starting salary: $0.50/week), he and my homemaker grandmother have a very comfortable life. So I called him to talk about the market and a few other things. What struck me most was how carefully he has considered their needs in choosing his financial positions. They cashed out of all but index funds when they moved into a retirement community and knew that they were going to require a stable income that would be largely immune to market fluctuations, and put everything in bonds and… Read more »
I’ve been a fan of Andrew Tobias for awhile, but just read “Smartest Investment Book You’ll Ever Read” by Daniel Solin. I liked the exercise for determining your risk tolerance and wish I had something like that 20 years ago. He also has a 401(k) book out that I want to get my daughters. I see Peter Schiff has a new book out (and Harry Dent has one coming out in a couple of months) so will see if I have the fortitude to read them. I’m also interested in the “Little Book that Saves Your Assets” but the library… Read more »
WRT Four Pillars: I was just re-reading my copy of this over the weekend. The chapter about market bottoms is eerily on point. It provides a bit of solace and perspective when you’re losing your tail in the a particular asset class.
This Peter Schiff guy.. pegged it dead on.
JD, it’s these kinds of insanely useful posts that make you the blogging god that you are. I make automatic investments into index funds every month no matter what, but I know this article was a help to thousands of your readers. If there was a nuclear war, I *might* stop investing in index funds each month, but then I’m probably not going to care about my portfolio at that point anyway. For people just getting started, Vanguard is the most recommended investment company, period. I can safely say this after having read dozens of PF books and thousands of… Read more »
Personally, I took last weeks sell off as the incentive to finally set up my Roth IRA. I figured I was buying low, and by “dollar cost averaging” I can buy even more if it goes lower.
That said, I’m almost glad I didn’t have money in the markets when they dropped so severely. It would have been hard to stomach.
I am continuing to buy a low-cost index fund with every pay period, taking advantage of dollar cost averaging. Then again, I have at least 30 years until retirement, so I can avoid looking at the statements for quite some time. For those who have a lump of cash (401K), it would seem buying in over time might offer the lowest risk, because not even Warren Buffett can predict with certainty when the “bottom” is. I was recently told by my financial advisor that he expects a typical post-crash bump, and that then he expects a SECOND crash before we… Read more »
I am a firm believer that your philosophies are the true measure of your success. I think that you’ve given some good guidance for the new investor, as well as the seasoned investor. Right now, I keep most of my money in an ING account. But seeing how the market is going, I can’t help but feel like the stock market is a good starting place now for new investors. My lack of knowledge of the fact is reason enough for me to hold tight though. Any suggestions, otherwise?
Caleb
http://www.mefinanciallyfree.blogspot.com
I have a 30 year horizon before I can tap into retirement accounts, so I plan on maxing out everything I can in that respect. I’m not very interested in tomorrow’s closing prices, but those of tomorrow’s tomorrow.
If you are going long and can handle the risk, I think now is the time to follow Warren Buffet’s advice: “Buy when everyone else is selling, and sell when everyone else is buying.”
My wife and I set up our retirement accounts in July of ’07. We made the bulk of our buys around September and October (when the market was at an all time high). I’m loving this downturn; I’m purchasing double the amount in my accounts than I was a year ago for the same amount of money. This downturn is driving down my cost basis and increasing my share position. I’ve got over 30 years before I retire. In my opinion, the market is on sale. Buffett once said that a common fallacy among investors is a wish for increasing… Read more »
I love your blog JD, but you are still drinking the Kool-Aid along with the majority of personal finance bloggers. You are caught up in mass delusion. The party is over, the age of prosperity in America propped up by borrowing money from the savers of every other nation is over. Now is not a good time to invest in stocks, which are likely to continue to lose value for years, followed by a cycle of inflation that will reduce their value even more. Get out before your money is completely gone. “It will come back” they all say, but… Read more »
(Please note that dollar-cost averaging has critics with valid points.) You are being far too open-minded. Anyone who calls a generally accepted theory, “bunk”, is probably the pot calling the kettle black. Like almost every risk-management strategy, dollar cost averaging will reduce your return right along with your risk. The price you get for your shares when you sell them will be the same regardless of when you bought them or how much you paid. If you invested a lump sum a year ago, you now own a lot less stock than if you had invested the same money weekly.… Read more »
“Unless you sell your stocks, you haven’t lost anything at this point – it’s all on paper.” This isn’t true, and if you interpret it in a way that makes it true then it’s meaningless. If your stocks are down then you purchased something that now has a different value than when you purchased it. It may go back up in value, it may go down in value. But the fact is that in this moment the total value of what you have is less than it was before. There’s no getting around this. What may or may not happen… Read more »
s an investor you should be able to come to terms with the fact that you may gain or lose obscene amounts of money in a given day
As the Yale economist Robert Shiller has pointed out, stock values aren’t “money”. They are just guesses of the stock’s value based on what a very small group of people who are buying and selling today think the stock is worth at this moment. We extrapolate a value from that.
This is why, unlike money, stock value can just disappear and reappear.
Excellent post. You make a number of very good points. There’s been so much written about how we got into this mess, and I wanted to point people to
Plunder. Danny Schechter identifies some of the shameless profiteers and calls for an investigation of those behind this shrewdly engineered subprime Ponzi scheme.
“STICK TO THE SCRIPT”.. that’s my motto.. i’m not changing my investing strategy.. i will keep investing a fixed amount to my 401k and roth.. regardless of what the market is going through
i have 30 years before i retire so i will make adjustments later.. now is not the time
In my mind, there is “risk tolerance” and there is “stupid”. Risk tolerance can guide you through the types of markets that were normal up until last year. When you put money into a market with this much volatility, anything other than cash and T-bills is just stupid. We don’t know where this is going. Keep your powder dry until the waters calm.
“It took 27 years for the stock market to recover after the first great depression. Are you perpared to wait for it to come back?”
I don’t retire for at least 35 years so, uh, YEAH!
I have to disagree a little bit with Justin. The losses aren’t real until the stocks themselves are sold or the company goes under. If you’re that down on the investment, then it probably isn’t a well run company in the first place (and you should get out by all means). This is true for both positives and negatives, you really didn’t make a lot of money at the height of the market unless you sold out at a positive. Just because the value of your stock moves up or down, it’s not real until someone else buys it from… Read more »
@32: I totally agree with you.
People I work with are walking around talking about how their 401ks are down 20% so far this year and how they have lost money. What’s funny is… they’re in their 20s.
When you put money into a market with this much volatility, anything other than cash and T-bills is just stupid. No, in fact the contrary is true if you are prepared to buy and hold investments long enough. This again is the illusion that you lose “money” when the market declines. You don’t. Money is involved only when you buy stock and when you sell it. It doesn’t matter how many ups and downs there are between those two events. If you plan to buy stock and hold it for 20 years then the only thing that matters is how… Read more »
“When you put money into a market with this much volatility, anything other than cash and T-bills is just stupid.” No, in fact the contrary is true if you are prepared to buy and hold investments long enough. This again is the illusion that you lose “money” when the market declines. You don’t. Money is involved only when you buy stock and when you sell it. It doesn’t matter how many ups and downs there are between those two events. If you plan to buy stock and hold it for 20 years then the only thing that matters is how… Read more »
There is a quote that has been attributed to J. P. Morgan:
“Bear markets return stocks to their rightful owners.”
It seems he was right.
I’m 26 (I just wrote 25 and then realized I was wrong… that made me feel old) I’ve been contributing 7% of my 28k/year to my 401k since about a year ago… one month after I was eligible by my company’s policy. I have at least 40 years until I retire… maybe more if I really love what I’m doing at 65 and am in good health. I don’t want to worry about it, but I’m a worrier by nature so it does take a little bit of a pep talk to remember that what I’m actually doing is getting… Read more »
@Ada #6: It’s a good point, and I do have some of my Roth IRAs in fixed income investments. However, you mentioned CDs and bond funds. Unlike CDs and individual bonds, bond funds don’t have maturity date and, consequently, their value fluctuates. Individual bonds – government, municipal or company have a specific maturity date; so while municipal or company bonds may carry some risk of default, the risk is small provided you buy AAA bonds. But bond fund value is based on value of all bonds it contains on the secondary market. This value is usually goes up when the… Read more »
the risk is small provided you buy AAA bonds.
The risk is supposed to be small, but all those bonds backed by real estate that are causing the current problems were rated AAA. The only really AAA bonds are US government issues. And you can argue about that.
The distinction between bonds and bond funds is a good one. The advantage of a bond fund is the same as a mutual fund, diversification. But, as was pointed out, unlike owning a mutual fund owning a bond fund is very different than owning the underlying securities.
There are too many variables to give a one size fits all answer(as JD and others have pointed out). A lot also depends on your risk tolerance. There is nothing wrong with putting money into a savings account of CD if you tolerance for market fluctuations is low. If you have a longer time frame or if you are ok with knowing it may drop in value the coming months may be an excellent time to buy. If you are going to buy do not go all in or for that matter all out at one time. Buy and sell… Read more »
Hope we see another nice rally tomorrow 🙂
Rather than waiting until April to make the entire contributions, my husband and I are going to make half of our annual Roth IRA contributions tomorrow! We are excited to be contributing while the market is at a low point, as we won’t be cashing in for decades to come. For any young people out there, I want to encourage you to invest what you can now, as long as you’re investing in products not outside your comfort zone!
I’ve seen others make this same mistake: paying down your mortgage is not an investment in real estate. You made your investment in real estate the moment you signed that mortgage. Paying down the mortgage has no effect on your asset allocation, nor does not increase your exposure to the real estate market. It is paying down debt, pure and simple.
Awesome post J.D.
“It took 27 years for the stock market to recover after the first great depression. Are you prepared to wait for it to come back?” This is true, but in all market history, there was only one great depression. After other crashes the market recovered sooner. After 1987, it took only a couple of years if I am not mistaken. We don’t know if this situation is more like 1929 or 1987. Sure, there was no recession in 1987, and there is one now. But there are differences between now and 1929 as well, specifically the government policies and the… Read more »
I am so glad you pointed out that if you have not done anything in regards to your (stock market) investments, you haven’t lost anything. “It’s all on paper.” I am so tired of hearing people say they have lost all this money, when they haven’t actually done anything with their accounts. Their shares don’t disappear if they are in a mutual fund (and I feel comfortable saying that’s where their investments are since they are talking about their 401K’s). It frankly makes me think that these people must be incredibly financially uneducated (though they seem to be well-off). The… Read more »
“It took 27 years for the stock market to recover after the first great depression. Are you prepared to wait for it to come back?”
Yes.
I havnt been in the market lately, so I missed the big drop, but I am really looking forward to buying some quality stocks over the coming months to start my blue chip portfolio.
“It took 27 years for the stock market to recover after the first great depression. Are you prepared to wait for it to come back?”
No.
Don’t have that kind of time in my late 40s.
Participating in 1000 point daily volatility is not investing. It’s gambling. You wanna invest? Start a business and make something people want to purchase. That’s investment.
Ross Williams (comment #25): That is a beautiful analysis of dollar cost averaging. You made it so clear in a single sentence, “Like almost every risk-management strategy, dollar cost averaging will reduce your return right along with your risk.” To everyone who says you are ready to wait 27 years for stocks to return, I applaud you. I actually hope to retire sometime between 2024 and 2035, so I suppose you could say I’m willing to wait that long. But the truth is, it could be very hard to do. It seems easy when the market has only been down… Read more »