I absolutely believe in dollar cost averaging, along with low cost index investing it’s the best advice for any young person starting out and does well though bull markets where you have periodic corrections.
You can significantly outperform the market though by avoiding bear markets. You won’t get out at the top or in at the bottom but you can avoid the worst of the drawdown. You just need to be disciplined and stick to a strategy. There’s a hell of a difference between a 10% drawdown and a 50% drawdown, you need to gain 100% to get back to even from 50% down.
Yep cant argue with that. Difficult to do for many in a company pension scenario though. Not sure how possible it would be to park your existing pot in cash and continue to invest in equity with new contributions.
I have three schemes from different employers so have that flexibility thankfully. I bailed into cash on the largest of them about 6 months ago out of extreme caution. Probably right call just months too early
Cashing out a few months too early doesn’t make much difference in the overall scheme of things. I remember 2007/2008 when the shares were falling off a cliff you’d be looking at the indices every day and thinking shit what happens next? Eventually I gave up looking at them and left it off. It recovered within a few years anyway. I wasn’t even aware that there was a dip this week until I logged in here. The Dow has still only retreated to February levels. Invest in companies that generate cash for the long term.
It’s mad. I used to think they had this grand vision where the drivers would be replaced by autonomous cars in the near future and they’d own the market but I read the other day that investors want them to spin off whatever IP they’ve generated on autonomous cars. If they do that what’s left? Fuck all. And they think it’s worth two Tesla Inc.!
Equity markets having a hard time finding any kind of bottom. Global equities now below where they were a year ago and US equities heading there quickly. Wouldn’t be surprised at a flash crash one of these mornings.
We are now officially in correction territory, all US indexes >10% down from their high. Global equities down 15% from the Jan high. This is the beginning of the end.
The only question now is whether this is a correction like February or a bear market. My money is firmly in the bear camp. When good news like a GDP print of +3.5% is bad news, the party is over.
Interest rate hikes are badly needed though or they’ll have no wiggle room to act during the inevitable next economic crisis. The Eurozone is absolutely bollixed if it goes south in the next few years as I can’t seem them raising rates in the near term.
US economy is going to over heat if they don’t hike rates soon. If it hasn’t already. And if they overheat it and it blows up at these interest rates they are absolutely goosed
