No. of Recommendations: 3
Hello:

That is precisely the theory behind long-term, low maintenance index investing. The various yearly or monthly over and under valuations get smoothed out the longer you draw the chart. The bottom line is that on average it has performed at 10% per year or so regardless of the minor value fluctuations.

Once you start worrying about whether to buy this month or not, you inject your strategy in place of the index investment strategy and you run the risk of buying too high. OTOH, you have the chance to buy low and make a little bit more then you would have. If you have faith in this method, then maybe the index strategy isn't for you and you should be using your superior knowledge to pick individual stocks. I however know nothing about it and have even less time to learn enough about it with sufficient confidence to risk my life savings. Therefore I ride the average.

Turtle Rather then the Hare Forever,
Bob

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