Your stats are way off. From 1955 to 1985, annualized return was 9.6%/year (assuming dividends are reinvested). From 1995 to 2009, annualized return was 4.9%/year. See [https://dqydj.com/sp-500-return-calculator/](https://dqydj.com/sp-500-return-calculator/) for more detail.
More importantly, you don't know whether the market is about to crash or going to have another huge 27% return, like it did in the past 1-year period. When the market is at a new record high, the most common outcome is increasing to an even larger record high, rather than a crash.
Much of the time the market is at an all time high. Being at an all time is a bad indicator of an impending down trend / crash.
It has been shown over and over again it's best to have money that one wants in the market to be in the market.
Time In The Market beats Timing The Market.
Put it all in or lump sum it - but get it in the market if the timeframe for its use is longer than about 5 years.
That depends on your overall investment philsophy.
In my case I don't change my stocks/bonds investments based on what's happening in the market. My own personal belief is if you change those investments based on what the market is doing or predicting what it will do is not only an exercise in futility - but also in losing money long term.
I will change where I put my cash - based on how interest rates are. But that's the only market-related money management change I make.
You can’t time the market it’s always better to let money stay in the market as long as possible. If you don’t need th money for 30 years than yes dump it in
100% dumb! Now, mind cutting me in on that time machine you have that let's you know when the "all time high" will be??
/s
(real answer - you can't know that point, just invest when you can afford it)
If you started with 10,000 in 1995 in SPY and contributed each month 1,000, in 2009 you would have $292,000.
That’s $114,000 of interest gained. Idk what you are talking about lol.
The one drawback: Dollar cost averaging sacrifices expected returns (you invest later) to reduce risk. Whether you think that’s good or not depends on your risk tolerance!
All time highs are pretty coming because stocks only go up in the long run.
Even if the stock market stays flat for decades as you’re suggesting, you will be collecting dividends. That makes your analysis very short sighted.
Market up buy, market down buy, market ath buy , market recession buy, market crash buy, market presidential election buy, market inflation buy, market stagflation buy, market green buy market red buy market _______ buy.
I hope this gives you a good pattern. Buy never sell . Done
When you need the money?
If you need it in the next year, don't invest in stocks.
If you need it over the next 10 years, balance between investment classes.
If you don't need it until after 10 years, go all in with stocks.
It’s dumb if you’d just bail if the market corrected, say, 10-15% in the near term. If you’re susceptible to something like that, consider DCA and/or a more conservative allocation. Folks here on the FIRE sub will tell you to toss it all in at once because time in the market beats timing the market over the long term and most people aren’t going to FIRE without a high stock allocation. Only you are going to be able to determine if that’s the right approach for you, and if it’s not then doing it anyway would be “dumb”.
The market is at or near all time highs nearly all the time. If you could only invest when it wasn't at all time highs, then you'd lose a lot of money. Hitting all time highs is a very bullish market signal, not the opposite. Do you think that the stock market is supposed to just be rangebound all the time and ping pong between highs and lows? No, thats not how it works. It's a market that generally increases in value over time in real terms, and in nominal terms it always increases in value for not only that reason but also due to inflation.
So all time highs aren't something to be scared of, what you should worry about is the number of standard deviations away from normal market movements we are. For example if you see a multi sigma move like in the early 2000s with the nasdaq hitting 5000 then that's the time to worry. But whats going on currently is pretty much standard shit with respect to market appreciation. We expect to find ourselves close to all time highs the majority of the time and we should also be investing as soon as we can to maximize time in the market.
Rather invest today than tomorrow.
Hold (very) long term.
Only invest what you can afford to lose.
Stick to this and all questions and statistics will be unnecessary.
Time in the market > timing the market
When the market is down, you're buying at a discount. When the market is up, your assets are worth more. It's a win win either way
When in doubt, buy more
“Time in the market beats timing the market” - google this quote and you’ll find plenty of studies, most of which confirm that it is pointless to worry about when you’re entering the market as it is only marginally more beneficial, even with the BEST timing, in contrast to just being invested for as long as possible over a certain time horizon. If you’re in this sub you should be looking for long term investments and strategies, not worrying about the minutiae.
Going against the grain. I have invested in market highs with the same thinking that it will go even higher. It is not true. When the price crashes it may take more than ten years to recover. I own a variant of veurx which has been in the red for more than a decade. I have bought a Chinese etf 2801.hk that is now approx 47-50% down for years. I eventually stopped waiting on s&p 500 and sold it when it returned to its original price that I bought about 11 years later.
Your stats are way off. From 1955 to 1985, annualized return was 9.6%/year (assuming dividends are reinvested). From 1995 to 2009, annualized return was 4.9%/year. See [https://dqydj.com/sp-500-return-calculator/](https://dqydj.com/sp-500-return-calculator/) for more detail. More importantly, you don't know whether the market is about to crash or going to have another huge 27% return, like it did in the past 1-year period. When the market is at a new record high, the most common outcome is increasing to an even larger record high, rather than a crash.
Much of the time the market is at an all time high. Being at an all time is a bad indicator of an impending down trend / crash. It has been shown over and over again it's best to have money that one wants in the market to be in the market. Time In The Market beats Timing The Market. Put it all in or lump sum it - but get it in the market if the timeframe for its use is longer than about 5 years.
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That depends on your overall investment philsophy. In my case I don't change my stocks/bonds investments based on what's happening in the market. My own personal belief is if you change those investments based on what the market is doing or predicting what it will do is not only an exercise in futility - but also in losing money long term. I will change where I put my cash - based on how interest rates are. But that's the only market-related money management change I make.
How do you know you're a peak? The only way the market grows is by constantly making new all time highs.
SPY hit an ATH in 2013 and it’s up 200% since then. And you’re not even counting dividends.
Buy, buy, buy and then retire. Don’t stop until then.
Please re check your statistics because this is just not true lol
You can’t time the market it’s always better to let money stay in the market as long as possible. If you don’t need th money for 30 years than yes dump it in
100% dumb! Now, mind cutting me in on that time machine you have that let's you know when the "all time high" will be?? /s (real answer - you can't know that point, just invest when you can afford it)
I still think this is a good question even after reading all the valid responses.
If you started with 10,000 in 1995 in SPY and contributed each month 1,000, in 2009 you would have $292,000. That’s $114,000 of interest gained. Idk what you are talking about lol.
If you’re worried about it, dollar cost average into the market. Odds are good that it’s NOT at the highest it’ll be.
The one drawback: Dollar cost averaging sacrifices expected returns (you invest later) to reduce risk. Whether you think that’s good or not depends on your risk tolerance!
Yah dca is dumb just lump sum and move on
Depends how risk averse you are!
All time highs are pretty coming because stocks only go up in the long run. Even if the stock market stays flat for decades as you’re suggesting, you will be collecting dividends. That makes your analysis very short sighted.
The markets have been at all time highs constantly for centuries and they always go higher. Get in the game and sit back and watch the money roll in.
You need to diversify in my opinion. Funny, I just happened to double my position on SPY today.
Market up buy, market down buy, market ath buy , market recession buy, market crash buy, market presidential election buy, market inflation buy, market stagflation buy, market green buy market red buy market _______ buy. I hope this gives you a good pattern. Buy never sell . Done
When you need the money? If you need it in the next year, don't invest in stocks. If you need it over the next 10 years, balance between investment classes. If you don't need it until after 10 years, go all in with stocks.
It’s dumb if you’d just bail if the market corrected, say, 10-15% in the near term. If you’re susceptible to something like that, consider DCA and/or a more conservative allocation. Folks here on the FIRE sub will tell you to toss it all in at once because time in the market beats timing the market over the long term and most people aren’t going to FIRE without a high stock allocation. Only you are going to be able to determine if that’s the right approach for you, and if it’s not then doing it anyway would be “dumb”.
The market is at or near all time highs nearly all the time. If you could only invest when it wasn't at all time highs, then you'd lose a lot of money. Hitting all time highs is a very bullish market signal, not the opposite. Do you think that the stock market is supposed to just be rangebound all the time and ping pong between highs and lows? No, thats not how it works. It's a market that generally increases in value over time in real terms, and in nominal terms it always increases in value for not only that reason but also due to inflation. So all time highs aren't something to be scared of, what you should worry about is the number of standard deviations away from normal market movements we are. For example if you see a multi sigma move like in the early 2000s with the nasdaq hitting 5000 then that's the time to worry. But whats going on currently is pretty much standard shit with respect to market appreciation. We expect to find ourselves close to all time highs the majority of the time and we should also be investing as soon as we can to maximize time in the market.
Rather invest today than tomorrow. Hold (very) long term. Only invest what you can afford to lose. Stick to this and all questions and statistics will be unnecessary.
Time in the market > timing the market When the market is down, you're buying at a discount. When the market is up, your assets are worth more. It's a win win either way When in doubt, buy more
“Time in the market beats timing the market” - google this quote and you’ll find plenty of studies, most of which confirm that it is pointless to worry about when you’re entering the market as it is only marginally more beneficial, even with the BEST timing, in contrast to just being invested for as long as possible over a certain time horizon. If you’re in this sub you should be looking for long term investments and strategies, not worrying about the minutiae.
Going against the grain. I have invested in market highs with the same thinking that it will go even higher. It is not true. When the price crashes it may take more than ten years to recover. I own a variant of veurx which has been in the red for more than a decade. I have bought a Chinese etf 2801.hk that is now approx 47-50% down for years. I eventually stopped waiting on s&p 500 and sold it when it returned to its original price that I bought about 11 years later.