Author Topic: New to Investing  (Read 1759 times)

Dimes

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New to Investing
« on: September 25, 2014, 10:20:30 PM »
I am very new when it comes to investing.  Recently I have read things about the stock market crashing in the next couple of years. 

I have quite a bit of savings and want to take the MMM advice and put a chunk of the savings in VTSAX.  Is it wise to do so now or wait until the predicted "crash" happens?

vagon

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Re: New to Investing
« Reply #1 on: September 26, 2014, 12:38:00 AM »
I have no idea about your personal needs and am not offering advice, but I will comment on generalities.
There are lots of theories out there, but empirical evidence tends to suggest trying to "time" the market is less successful than simply investing regularly over the long term in a diversified portfolio. There's plenty of examples on this forum and sites across the net of people investing in low management cost index funds for that purpose.

Just realise no-one can predict the future and whether the market will go up or down. Act accordingly.

DaKini

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Re: New to Investing
« Reply #2 on: September 26, 2014, 01:30:30 AM »
Is it wise to not invest now and miss all future gains/dividends and face the risk with currency (inflation/deflation/other)? Remember, there is no such thing as "not invested".

The more important question to ask is: would you be finde when investing, than the day after the market tanks and stays low for 10 years. If you can answer "yes", than invest. If this is money needed in the next 10 years, then dont invest in the market, go for vehicles with lower volatility.

Eric

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Re: New to Investing
« Reply #3 on: September 26, 2014, 11:03:14 AM »
I am very new when it comes to investing.  Recently I have read things about the stock market crashing in the next couple of years.

I have quite a bit of savings and want to take the MMM advice and put a chunk of the savings in VTSAX.  Is it wise to do so now or wait until the predicted "crash" happens?

First, stop reading stuff like that.  Instead, read stuff like this:

http://jlcollinsnh.com/stock-series/

No one, and I mean no one, knows what the stock market is going to do.  It could go up, down, sideways, or more likely all three in the next couple of years.  If you could predict this stuff, you'd be retired already.  Instead, pick a desired asset allocation, invest according to a set schedule, and trust that in 20 years (or however long) when you need the money, the market will be higher than it is today.

Terrestrial

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Re: New to Investing
« Reply #4 on: September 26, 2014, 12:51:52 PM »
A stock market 'crash' WILL happen at some point...probably many times if you are invested long enough.  The thing about it though...the only way it matters at all is:
1 - you panic and stupidly sell
2 - you need the money during the crash, and thus have to sell.

Both of these are relatively easy to overcome.  Don't panic over 'paper losses', and don't invest money you need anytime soon.  Different people have different opinions of what 'soon' is based in investing philosophy and risk tolerance.  For me it's 4-5 years.

The fact is, you could have put 100k into the market the very day before the market started crashing in late 2007 and if you had not touched it, woken up with ~125k in your account today. 

If you had been brave enough to keep regularly buying through that period, you'd have much much more.