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  • investing on the downturn

    what is your opinion on investing in the etf during a downturn , trying to time the market each month, rather than just auto deducting on a fixed date each month?

    kind of curious to know what really helps in the long run

  • #2
    Seems like a hard thing to get right each month. I would guess that some months you’ll get it right and others will get it wrong. The fact that you are auto deducting the investment each month means you are paying yourself first. I would wager that this would have more of an impact on your financial well being than trying to guess when the market is down and ready to go up. I assume you are buying and holding for the long haul of course. Just my two cents.

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    • #3
      Being busy in life , I think it is just easily to dollar cost average automatically from the MM account. I guess you could try to pick which day is going to be the worst or the best, but really how do you know when the market is going down or up when it will be a peak or a trough for that month or even week.

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      • #4
        what really helps in the long run is developing a reasonable plan and sticking to it. timing the market is incredibly hard if not impossible

        https://engaging-data.com/market-timing-game/

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        • #5
          Originally posted by IndianDoc1997 View Post
          what is your opinion on investing in the etf during a downturn , trying to time the market each month, rather than just auto deducting on a fixed date each month?

          kind of curious to know what really helps in the long run
          i say if you can correctly invest on the lowest price date of each month you should do it.

          so go on.....do it.....

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          • #6
            Jane Bryant Quinn: "The market timer's Hall of Fame is an empty room"

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            • #7
              If you still invested at the end of the month regardless, it can’t hurt. If it drops during a month with regularity then you would be lowering your cost average. If not, and you still put the money in at the end of the month, you are still investing regularly. Using an ETF would allow you to set a limit buy so you can get it at your price target if it drops enough. I would guess that over a prolonged period of time this could lower your overall share price. I say go for it.

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              • #8
                The market is down today, how do you know it will be down more tommorow or up tommorow ?

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                • #9
                  Originally posted by TXDoc21 View Post
                  Seems like a hard thing to get right each month. I would guess that some months you’ll get it right and others will get it wrong. The fact that you are auto deducting the investment each month means you are paying yourself first. I would wager that this would have more of an impact on your financial well being than trying to guess when the market is down and ready to go up. I assume you are buying and holding for the long haul of course. Just my two cents.
                  Yes i would be investing for the long haul, plainly, the retirement .

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                  • #10
                    Originally posted by ShredtheGnar View Post
                    If you still invested at the end of the month regardless, it can’t hurt. If it drops during a month with regularity then you would be lowering your cost average. If not, and you still put the money in at the end of the month, you are still investing regularly. Using an ETF would allow you to set a limit buy so you can get it at your price target if it drops enough. I would guess that over a prolonged period of time this could lower your overall share price. I say go for it.
                    yes, that is what i meant, by trying to time the market, getting an effectively lower price, but in the end i would buy it at the end of the month regardless of the price.

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                    • #11
                      Originally posted by Random1 View Post
                      The market is down today, how do you know it will be down more tommorow or up tommorow ?
                      i agree with u that market may be further down tomorrow, but already a gain of lets say 2% relative to the bet that i would make by auto deduction will significantly result in better returns.

                      in the end its just my thought process

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                      • #12
                        Originally posted by ShredtheGnar View Post
                        If you still invested at the end of the month regardless, it can’t hurt. If it drops during a month with regularity then you would be lowering your cost average. If not, and you still put the money in at the end of the month, you are still investing regularly. Using an ETF would allow you to set a limit buy so you can get it at your price target if it drops enough. I would guess that over a prolonged period of time this could lower your overall share price. I say go for it.
                        The market generally trends upward. You're more likely to miss days of gains than to buy in on the "cheaper" days of the month. (If one could identify down days a priori, Goldman Sachs and various hedge funds would do so successfully.)

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                        • #13
                          Originally posted by Hank View Post

                          The market generally trends upward. You're more likely to miss days of gains than to buy in on the "cheaper" days of the month. (If one could identify down days a priori, Goldman Sachs and various hedge funds would do so successfully.)
                          I just looked at charts for total US market by each year since about 2013 to present. Almost every month had a down day or more. Overall the market goes up, but it definitely had a decent amount of volatility even during this past decade of a huge bull run. The OP wants to invest every month. This system should work to his benefit. A lot easier to do with their plan of using ETF to set a price for your new $s to buy at a certain price. Set it each month and forget it until the end of the month. If your buy order still stands, just set it to market order to fill it. Repeat each month. Seems like this should work fine and make for a lower average cost over the long run. A bit of extra work involved but seems better than just investing randomly at whatever the price is that day. Especially should pay off during times of high volatility.

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                          • #14
                            Can you tell when the best time during the day is?
                            Can you tell which week it is?
                            Can you tell which month is best?
                            Why stop with just new money?
                            Yes, maximizing daily price changes is tantalizing.
                            Maybe you are more capable than anyone else.
                            No time of day, day, week or month has ever worked.
                            Pure luck. Time in the market beats market timing in the long term.

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                            • #15
                              Why not do both?

                              Allocate x amount monthly into your index fund(s) of choice.

                              Then you can use y amount to invest whenever you think is apt, monthly.

                              Should be fine long term, assuming x > y.

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