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Buy low, sell high for index funds?

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  • Buy low, sell high for index funds?

    Hello everyone,

    I don't individual stocks but own several index funds which are doing very well now. I have the VFIAX from Vanguard for one which follows the S&P 500 . The stock prices are going up but I do have some extra cash right now. Does the buy low sell high wisdom apply to index funds as well such as the VFIAX ? I also have bond index funds from Vanguard (VCORX). Any advice?? Thanks in advance!

  • #2
    Buy and HOLD for good index funds. Price will go up and down day to day, don't try to time it.

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    • #3
      Thanks . I have no intention of selling shares. But is it smart to BUY additional shares given the high price for an index fund (as opposed to an individual stock)?

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      • #4
        “Does the buy low sell high wisdom ”

        Start here. How do you do this except in hindsight?
        MF orders are filled at the days closing price.

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        • #5
          Originally posted by [email protected] View Post
          given the high price for an index fund (as opposed to an individual stock)?
          this doesn't make any sense, please explain what you mean

          if you're referring to the market price of exactly one share, that number is irrelevant

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          • #6
            you buy when you have money. thats it.

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            • #7
              Buy low, buy high, sell later.

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              • #8
                Peds and Lordosis said it. Pick an Asset Allocation (AA) create an investment policy statement (IPS) which is a document that helps you describe your plan.

                When you get $ buy for the long run and ignore the noise.

                Time in the market beats timing the market.

                If you have a short time horizon you should not be buying stocks. If you have a long time horizon, you will most often be best off just to buy as soon as you have $ to buy with. (Lump sum).

                Lump sum usually wins over long time periods and trying to time things gets messy.

                If you insist on trying to time it, I suggest you read the book value averaging (by Michael Edelson) and create a value path spread sheet, but recognize that people are irrational, emotional, flawed, pattern seeking primates and you are running the risk of screwing it up.



                I would just buy every pay period. Put it in and ignore the noise. You will be Dollar cost averaging (sort of) when you do this and you will be fine in the long run.
                Last edited by Tangler; 11-28-2020, 01:29 PM.

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                • #9
                  The market spends a great deal of time at or near all time highs. Don't let that deter you. In 30 years you'll wish you had bought more at today's prices.

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                  • #10
                    Index funds don't usually have the volatility to make it worth your while. 2008/09 and the early part of this 2020 year were the only recent exceptions. Buy and sell, buy back, sell, repeat is more for stocks - esp ones with significant volatility.

                    Plus, you are using mutual funds... if you do want to buy/sell/buy/sell indexes, use ETFs (SPY, VOO, QQQ, etc). Mutual funds only update price daily, have a lot of other disadvantages for traders, etc. They are, at best, the same as ETFs for buy-and-holders, but they offer many disadvantages for trading. The very fact that you are asking this shows you can stand to do a lot more research. You will get it if you want... info is readily available, but not really here (forum Bogle culture). Good luck

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                    • #11
                      I do index funds Though I am divesting out of bonds and moving them into index funds.

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                      • #12
                        how do you know the price is too high right now? like said above you only know if the price was too high right now in retrospect. Just keep pumping money in and buying as per your written financial plan. Have extra cash? either buy more index funds, or pay off debt, or if you are still meeting your financial goals, blow the extra money on something nice! would recommend when blowing the money buy experiences (kind of hard with covid though) or make sure you purchase something you value

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                        • #13
                          Originally posted by racelari View Post
                          how do you know the price is too high right now? like said above you only know if the price was too high right now in retrospect.
                          Where's EntrepreneurMD when you need him? ​​​​​​​

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                          • #14
                            Originally posted by xraygoggles View Post

                            Where's EntrepreneurMD when you need him?


                            Ultimately the real question is: Do you think there is going to be a better acquisition price than today? The recession was a piece of cake to foresee given the data last year - that's why I was confident enough to forewarn you guys. Right now the data I see suggests we limp forward in the near future but not good enough for anything actionable, perhaps a bit of profit taking/tax lost harvesting mid-late December. Longer term data is less clear to me right now.

                            Right now, I'm neither a buyer or a seller. A 10% correction seems common once or twice a year and a good time to take advantage of pricing if you don't want to risk buying at a short term top. Heck I took advantage of a 9% retreat just last month (yeah yeah yeah, you didn't tell us the second you traded). Taking advantage of those will give you more opportunities than waiting for the big one. However when a big one happens a lump sum of my dry powder will likely be in order.

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                            • #15
                              Originally posted by EntrepreneurMD View Post
                              The recession was a piece of cake to foresee given the data last year - that's why I was confident enough to forewarn you guys.
                              and what difference did it make?

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