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I am funding my vanguard Roth IRA account, (maxed contribution for 2010 and 2011). Wondering whether I should watch/wait for further decline and buy lower, or at least until things are more contained regarding Japan.
Thoughts?
Thoughts?
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when you retire in 20-30 years, if the DOW is at $25-30k it won't make much difference if you bought at 12k or 11.5k.
If you get into a timing game, you're just gambling. If you're trying to save $500 on a purchase price, you're essentially saying "I bet you $500 that the market will keep going down." The market could go up, and you'll be out $500 for no reason, or it could go down and you'll save $500. It's a complete unknown.
Short term - the market is unpredicatable. Long term, you should expect to profit if you get in at a reasonable price.
Right now the DOW is trading around 13.2 times prospective earnings. That's a reasonable price. (at one point it was up to the upper 30's, which would have been unreasonable IMO)
So if you're ready to invest, have the available capital to invest, are okay with the risks of investing, and the market is presently at a reasonable price - you should likely invest today.
Long term investment decisions should be based on: is the current price reasonable or not?
Not based on, "do I think tomorrow's price will be slightly more reasonable?" -
I agree with the above post. I think anytime is a great time to invest for the long term. The market will very likely be much higher in 15 years and the shares you buy now will only be worth more. You can also dollar cost average and put money in every month for 2011, rather than one lump sum for the year.My other blog is Your Organized Friend.Comment
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Your 2010 contribution needs to be in by April 18, so you don't have much time there. Just send it in. As for your 2011 contribution, if you've got the cash, I'd put it in. The sooner you get it tax-sheltered, the better. Might the market drop more? Sure. It might also bounce back up. I'm guessing you are relatively young. In 20 or 30 years, it won't matter a bit if you did a lump sum today or spaced it out over the next few months.Steve
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I would say to continue to add to your Roth Ira's monthly, I think that's all that matters. We deduct $800 a month for my wife and I. I understand you wanting to buy low, I feel the same way, but don't actually do it. Just be consistent each month and I think everything will work out.Originally posted by adamhoud View PostComment
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