“Dow Ends Thursday with 2nd Worst Loss of the Year”
That’s the headline on an article by Kate Gibson for MarketWatch. Guess what day I sent in my regular IRA contribution? Yup, Thursday. It was so “nice” to have my account balance be down “only” $167 AFTER I added $500 to it. (My IRA is in a world stock fund, with 97% of its assets in stock.) I knew the market was down when I did it, but I’d committed to sending in $500 per month, every month, no matter what, until my IRA is fully funded for this year. (Which will be after my November payment.) Then I will move to a schedule of $416 or every month, regardless.
I keep telling myself that this is dollar cost averaging in action, but boy did it feel counterintuitive to invest on that particular day. Still, buy low and sell high is the goal, not the reverse. And this way I was able to buy more shares than I otherwise would have.
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August 13th, 2007 at 8:22 am
Well, you’ll have the last laugh — it will all come around. Unless you’re Warren Buffett, you’ll probably do just as well investing regularly than trying to make some great timing move. Still, I know it’s annoying to “lose” money the day you invest it!
August 15th, 2007 at 8:21 am
Studies show over and over again that market timing doesn’t work yet (as we all know) tell THAT to your gut.
You did the right thing, and my gut feeling, for what it’s worth, is that you will indeed be glad later you followed your strategy…and not your fear.