Contribute to Index Funds Now?

[DivietoDiSosta]

Hi all,

Just a quick question for those of you with more experience investing:

I got a bonus that I'm planning to use to buy additional shares in my stock index funds, but since the market has been trending up I wonder if it's smart to buy now or to wait until it inevitable stutters again and buy at a lower point.

What do you think?

Thanks!

[Thrif-t]

Well what you are suggesting is called market timing, never a good thing. I'd just invest a little at a time if you are afraid of the market going down. That way you are getting in at different price points.

[DivietoDiSosta]

Thanks. I did a little bit of googling based on your reply, and found an article on betterment.com (can't post the link) that seem to be advocating jumping in when you can and rolling with the punches because you'll come out ahead in the long term.

Is this your view?

[greatm31]

Well if you're investing for the long haul (which I hope you are!) then small fluctuations don't really matter. Lots of people have been "waiting for a correction" for the last few years and have missed out one some incredible gains. Remember, the market has long since made back the money it lost in 2008, so chances are it's a good bet to keep putting in money every month no matter what.

[Thrif-t]

Thanks. I did a little bit of googling based on your reply, and found an article on betterment.com (can't post the link) that seem to be advocating jumping in when you can and rolling with the punches because you'll come out ahead in the long term.

Is this your view?

Yes, plus I think sometimes life gets in the way while you're waiting around and all of a sudden a lot of time has past and you haven't done what you said you wanted to do, invest. I'd just go ahead and do it now. I agree with greatm31 too

[rennigade]

In 1960 the S&P 500 was at 59. Today in 2015, the S&P 500 is at 2,111. There seems to be an upward trend over the years.

Its impossible to time the market. Buy and hold. If you need money in the near future that money should not be invested in an index fund.

[snafu]

DDSosta, I know just how you feel, it makes me nervous to plough a major sum into one product all in one day. If you plan to leave the money in your Index Fund for a minimum of 5 years you might prefer to DCA [Dollar Cost Average] via automatic purchase, dividing the sum by 12 or however many months makes you feel comfortable. You retain the option to stop the process with notice of two business days. You stay in control.

What is your Risk tolerance? If there is a bad day, do you rush to buy while everyone else is selling? Do you consider yourself a contrarian?

[DivietoDiSosta]

DDSosta, I know just how you feel, it makes me nervous to plough a major sum into one product all in one day. If you plan to leave the money in your Index Fund for a minimum of 5 years you might prefer to DCA [Dollar Cost Average] via automatic purchase, dividing the sum by 12 or however many months makes you feel comfortable. You retain the option to stop the process with notice of two business days. You stay in control.

What is your Risk tolerance? If there is a bad day, do you rush to buy while everyone else is selling? Do you consider yourself a contrarian?

Thanks, snafu.

I am the type to hang on no matter what. I don't sell during bad times, but neither do I buy. In 2008/09, I kept everything I already had, but waited it out and squirreled new funds into my savings account until I was confident enough in the recovery continuing to invest a large sum.

So my style is, commit and stick to my guns. It's just hard to take a long-term perspective sometimes, even when the investment is for the long term.

[DivietoDiSosta]

DDSosta, I know just how you feel, it makes me nervous to plough a major sum into one product all in one day. If you plan to leave the money in your Index Fund for a minimum of 5 years you might prefer to DCA [Dollar Cost Average] via automatic purchase, dividing the sum by 12 or however many months makes you feel comfortable. You retain the option to stop the process with notice of two business days. You stay in control.

What is your Risk tolerance? If there is a bad day, do you rush to buy while everyone else is selling? Do you consider yourself a contrarian?

Thanks, snafu.

I am the type to hang on no matter what. I don't sell during bad times, but neither do I buy. In 2008/09, I kept everything I already had, but waited it out and squirreled new funds into my savings account until I was confident enough in the recovery continuing to invest a large sum.

So my style is, commit and stick to my guns. It's just hard to take a long-term perspective sometimes, even when the investment is for the long term.

[feh]

Thanks. I did a little bit of googling based on your reply, and found an article on betterment.com (can't post the link) that seem to be advocating jumping in when you can and rolling with the punches because you'll come out ahead in the long term.

Is this your view?

Yes, absolutely.

Mathematically, the best answer is to invest ASAP. Do not time the market.