the market: stocks, bonds, options, whatever

[kingsfont]

Up 14% today. Expecting another leg lower tomorrow.

 

[Bleaney]

With caveats. For example, if you invest in a pure growth fund that stays flat for a decade that would be worse than DCAing into dividend aristocrats fund that will continue to pay returns.

I started investing heavily during the COVID crash so I've seen right there how impactful it can be to lump-sum at the right time, and I was mainly accumulating dividend funds so I didn't even do as well as if I had invested in pure growth then.

Most of my friends are DCAing into growth or balanced funds so they take the hit every time the market corrects while I'm using that opportunity to sell off dividend funds that held value, and lump-sum aggressively into the growth funds at their 200 day moving average.

Arguably, this approach takes more patience because I have to wait for the correction, which is usually a longer wait than just waiting for the recovery after the drop. But it offers some protection against the tail risk of flat growth for a decade.

It all depends on what time horizons people have. At my stage of life, a flat, or negative decade would range from disappointing to disastrous. But for those just starting out, or with more than a decade to play with, such a period would represent an excellent opportunity to get lots of funds invested cheaply, just by regularly continuing to turn up every month and DCA into lower risk ETFs or Index Funds. And then all they have to do is be patient and wait.

History tells us that in time, those markets are going to be going up, and they will have had a long buying opportunity to take advantage of flat and / or discounted prices. That would pay them very handsomely, in the longer run.

Although it was the Covid stock price crash that got me interested enough in investing to start looking into things a lot more thoroughly and seriously, to avoid diving in with no idea what I was doing, I was too late to catch that particular bargain opportunity - for the very brave - it has to be said. Although as it turned out, 2022 also ended up being a flat to negative year, which got me off to a good start, as although I didn't know it at the time, even that was a very good buying opportunity, and I solidly DCA'd my way in, over the course of that year.

Obviously we don't know when the current 4 year Bull is going to run out of steam, so I'm having to hedge my bets a bit, as it would be devastating to loose all of my gains, and not have them recover before my planned retirement date.