*Note: this post isn’t finished.
Is it time to invest? It depends. Let me explain what I mean by that statement. Historically, stocks will go up after the recent carnage that has wiped out over $8 trillion in stock market value. We might even see an up tick in the range of 18% – 22% but don’t be fooled.
The hurricane isn’t over; this is the calm before the storm. So, what should you do? Well that depends on where you are in your investment cycle. If you are close to retirement and you didn’t heed the age-old advice to move more money to cash the closer you get to retirement, then you might need to push retirement off a bit, but this also depends on how much you have lost and many other factors. If you fall into this category, then I suggest you talk to your financial advisor.
For those of you who are not close to retirement, then you have several options to explore. If you are investing for the long-term and want to reduce the variance in your portfolio, the easiest and simplest investment philosophy is called ‘Dollar Cost Averaging’ (DCA). Dollar Cost Averaging is investing regularly scheduled amounts into a fund(s) and/or stock(s). The idea is to spread the risk consistently over time, but most research into this form of investing has debunked this philosophy. The problem with DCA is that the market is on an upswing more often than on a downturn. So in actuality an investor will be paying more for a stock over time than someone who places a lump sum in the market during a downturn. If you have been using this method, I recommend that you stop and choose another method and/or contact a financial advisor.