I have to laugh. I'm just getting into investing and I put 50% of my net worth in over the last few weeks. Half about a week ago and half yesterday because I figured "Hmm, looks like it is starting to bottom out".
FAIL - I guess this is why they say don't try to call bottoms.
My plan - keep putting money in. I'm young and holding for the long term, this is a great buying opportunity no matter what happens today, or monday, or 6 months from now.
For me specifically, I'm socking a lot of money away in a retirement account to make up for the fact that when I start my company, I won't be making many contributions until I start making money.
Having money working for you even when you are not working helps reduce the risk of starting a company.
I respectfully disagree with the other posters here. I feel that you need to judge each and every investments on its merits. The market does not move exactly in lockstep. When Goldman Sachs was at 85, it was an effing steal. I would still invest in it today if I had the money, but I wouldn't totally pounce on it.
As for timing the bottom, yea that's kinda hard. I would watch more experienced players call it cough Buffett cough, instead of listening to random people (yes I know, random ppl like me) on the internetz. ;)
I doubt the bottom will come till next year my friend, so buy incrementally. And I feel the Christmas season will be a fluke of optimism, however the news media may spin in into a the Nightmare Before Christmas... markets are random, probably better off investing in yourself at this point.
I think you have the right plan, the only thing I would change is big moves like 50% in a few weeks.
Go slow, then you don't have to worry about picking bottoms.
You should spread your risk out with even increments of investments every month for the next 2 years. Since you're young, this is an excellent time to invest because you're definitely getting a bargain in the long run.
I am doing the same thing. I increased my monthly 401(k) contributions and am holding for the long term - 30 years or so I guess. Hopefully we will have recovered by then ;)
If you're going to be putting money to work, at least sell puts. You can catch an extra couple percentage points and will give you an edge in the long term.
I am sick and god damn tired of ignorant poor people believing there is some leviathan force of rich people out there keeping everyone else down.
I am sick of all these huge numbers being quoted without acknowledging that most of it is tied up in the working capital of major companies.
Sure socialists, tax the hell out the rich in the erroneous belief that they have enough money to support everyone. Watch society fall apart. I'm sure you have a 5 year plan to fix everything.
Well, that seems to have been a big deal about nothing (as of just before noon, New York time). It opened about 4% down, but crept back up and is now 3.5% down, at 8,387.
I would like to share with you some comments from a friend of mine, living in the so-called second world:
(I've edited out quite a lot, mostly offensive words)
I am unable to comprehend what is happening at the moment. Some argue that the neoliberal capitalist system is collapsing, others that is another way to turn public funds into private funds. I am very confused.
You know that 400 americans own 1.7 trillon USD? (the GDP of Argentina is 250 Billon USD). You know that 50% of the world population has 1% of the GDP.
And then they want me to believe that there is a financial crisis. There is a crisis, one that nobody mentions, people are starving and dying, and nobody gives a shit, they only care about themselves. Well I would love to believe that they are really losing money in the big casino ...
It's not poor people, it's people without equality of opportunities, tied by family weights, unable to become enterpreneurs even if they really want to because society around them has collapsed.
Emigration is, so far, the only solution (even if painful), but despite being college-educated and very capable, the western world doesn't want them--not easy to get visas of any kind.
And 50+ year old people don't feel like moving at all, because their country used to be fine and is now, very deep in, their home. One can always pretend that nothing has changed--we humans have perfected the art of self deception.
Was it their fault that it collapsed? That's a slippery slope. I have no answer. But the current situation of Argentina may serve as a comparison reference to any over-hyped news of "collapse" or "martial law required to fix the economy in the USA": the USA is doing fine, thank you, as can be seen in this very forum of enterpreneurs.
Did those people bring it about themselves: without really knowing the story of Argentina (except dictator, brutal torturing and stuff), I would wager to say YES. Probably it was another case of communism gone wild. And that is why an attitude like the one from the "second world" you quoted annoys me a bit, frankly. It annoys me if people don't even try to understand the "financial crisis" or what is causing it, and instead simply scapegoat some imagined rich people whom they blame for everything. Because that is exactly the attitude that then makes the real shit happen, communism, fascism, civil war and the likes. I am not saying that I don't feel sorry for the poor, complex systems are hard to understand, and I can not paint you a complete picture of the financial crisis, either. It is important to try to understand it to avoid making the same systems as in the past.
I agree with you. Yet my friends' imagined "rich people" are everyone living in a developed country. I.e. "rich people" means something entirely different to him.
Some people was born after the collapse, or were children at the time. Yet the first world handles them just the same way as their perhaps accountable parents. And exactly how is their fault in any way? So from their perspective, the whole situation is just unfair, and the cries of self-pity of large financial institutions very much out of place.
Also: here is an account of how life is currently in a country that used to be just fine, and now is totally broken down:
Search for "We understood it the same way a kid understands photosynthesis" for a description of how it feels to have the process explained of how a large middle class falls down to a low class, and when that means your own class in your own country. I found it heart-shattering.
A tiny white box is not the best way to go into depth into this, but a couple notes:
1. Putting neoliberalism to blame here is not exactly the case. It had its moments (allowing certain banks to double their leverage ability) but there were plenty of regulatory screwups: Reducing Fed Funds rates to 1%, Fannie, Freddie, Sarbox, and several others.
2. Where is that 1.7T that those Americans own? This isn't like Ducktales where there is a giant building full of gold. It's the capital that drives our economic system. Of course some of them don't know how to allocate those resources, but its out there.
3. It's terrible the amount of human suffering to the scale that we have is tolerable today. But it's my belief that other economic systems will not do any better. Credit and liquidity affects everyone, including charities.
These discussions are better left to an hourlong discussion over several pints, but those are my thoughts.
FAIL - I guess this is why they say don't try to call bottoms.
My plan - keep putting money in. I'm young and holding for the long term, this is a great buying opportunity no matter what happens today, or monday, or 6 months from now.
For me specifically, I'm socking a lot of money away in a retirement account to make up for the fact that when I start my company, I won't be making many contributions until I start making money.
Having money working for you even when you are not working helps reduce the risk of starting a company.