> even the premise of index buying requires some smart timing
Or just investing a regular amount of new money on a regular schedule, which will even out the timing issues.
Or just investing a regular amount of new money on a regular schedule, which will even out the timing issues.
The unwritten context of "buy and hold an index fund" is that it's for retirement—people with 20, 30 or 40 years before they actually need the money. That's enough time to ride out swings in the market.
If you need the money to buy a house or start a company in a few years, keep it in cash.
Let's say I'm 30 and want to save for retirement and let's imagine these crashes keep happening at around the same frequency (every 8 years or so?). This means when I reach my retirement age I might have to wait around 8 years for the market to rebound if I'm not lucky enough to buy my shares on the bottom of the charts, right?
The reason I'm asking is because I keep reading about how an index fund will eventually, given time, be worth it, even with these frequent crashes of late, but when I'm 60 it might not be possible for me to wait for a better time to cash out, in particular given my country's (men) life expectancy of around 75. In my view, this doesn't seem as safe as it sounds but I might be missing something.
Let's pretend I have my own retirement fund as a savings acount at around 1%, a very slow but pretty much safe growth. This way I might end up having with a more stable outcome when actually retiring which I believe is what most people would be looking like. I hate reading a market crash could wipe out poor and middle class retirement funds and have a hard time understanding the point besides greed or lack of knowledge.
Again, I'm most probably the one with lack of knowledge on this, just sharing my doubt as a very very conservative investor, if at all.
http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_p...
Unless you're able to make huge contributions, a savings account is unlikely to provide the funds you need for retirement.