Quote:
Originally Posted by MoneyGuy
I think the economy will start to improve near year end. The market tends to lead the economy by about half a year. I think young folks with lots of years who are talking GICs or going into cash for a couple of years are crazy. When the market recovers, it tends to make up a third of what was "lost" in the downturn within the first 40 days of the recovery. I don't think the recovery will happen immediately but I would DCA in over 2-4 months, so that in four months your fully invested.
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With all due respect to MoneyGuy's here - I'm going to disagree here. DCA is fine, but I think it's over a much longer time horizon, depending on when you think things will bottom out. Personally, it's at LEAST another 6-9 months out. Buying into the market before Q1 and Q2 numbers are released this year is pretty much signing yourself up for a loss IMHO. I'm not the bear Claren is, but I'm certainly bearish on the next 9 months. At least. We're in it deep kids.....
My recommendation: Make the contributions, but hold them in cash. I've got mine in a combination of Money Market / High interest savings that I can sell and deploy into the markets within a week's notice.
There's no point trying to catch a falling knife....