06-01-2014, 05:27 PM
(06-01-2014, 04:38 PM)daat99 Wrote: My worst fear is that I'll put all my money into new portfolio just to get it cut in half in a month time because a bear market just started.
For now, I prefer sitting on the side and wait for the bear market to show its ugly head first.
I don't blame you at all, daat. But just to play devil's advocate (and perhaps to completely contradict myself), a lot of people rightly believe that time IN the market is far more important than timING the market. The idea is that even if valuations are high right now, you are still missing out on dividends and growth in the meantime -- there is a real cost to waiting. And, we may NOT be on the verge of a big decline. Nobody at all can predict where we are headed from here. Here's an article that notes that on an inflation-adjusted basis, the S&P is not at all-time highs after all.
If you believe that the general trajectory of the market over very long periods of time is up, then the market will make new highs frequently, and while they may all seem scary, they are all lower than the newest high.
Maybe the best approach would be to develop a plan to very gradually ease into the market, so that you are not fully exposed quickly, but you still get some of your money working for you?