Last Week, I said now was a great time invest in stocks. Those who listened to me are probably upset as the Dow continued to drop from around 13,250 to 12,700. They may get more upset with me in the coming weeks and months. I’m confident that in years though, they’d come to love me.
I can never understand a couple of things about people’s philosophy and investing. A month ago, people considered it a great time to invest pushing the Dow over 14,000. A month later, some companies that made some risky bets are paying the price and we should sell investments today? Buy more at 14,000 and selll at 12,700? That sounds backwards to me. I think it makes more sense to invest now than it did before.
Putting my money where my mouth was, I upped my 401K contribution rate to buy cheaper stocks. I will continue at that pace however long the market stays down or until the I reach the yearly limit. If the Dow gets back up to 14,000 or 14,500, I may lower my contribution rate a bit and hope for pullback. In this sense, I am trying to time market. This will be different than the traditional definition of trying to time the market. First, I will be invested in the market at all times, good and bad. Second, I’ll continue to invest at regular time intervals, despite what the market might do.
I suppose that I could simply put their 401K on auto-pilot, but since I’ve started this blog finances have been on my mind. It’s easy enough for me to go in and make the changes as necessary.