No. of Recommendations: 0
In your example, there are times when it would have been much better to be in cash. In your example, a decent market timer would have known, in general, when to be in cash and when to be in the market. Without those losses, he would have done much better. In your example, you have a loss for the first 5 years. If that satisfies you, fine. It would not satisfy me. I am focused on making money.

About a year ago, I looked at a 5 year period of dollar cost averaging into VFINX on a monthly basis, and the results were negative. Possibly doing it for the last 5 years from now you would have a positive result. That is not the point.

Five years is a long time to have a loss. In any case, your example is not what I would call a good record. In addition, there is no reason to believe that the next 40 years will provide anything like those returns. They might be better or worse. Just blindly assuming that they will be the same or better does not yield an investing strategy worth following.

I do think, of course, that putting money into a retirement account on a regular basis is a good thing. I just do not believe that it should just go into an index fund or some other similar thing.

At this time, the market looks pretty good. I have no idea how long that will last. My only goal is to make the best of the good times and to get out with some profit before things get bad, if/when that happens.
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