Getting into the Market?

[drfunktacular]

Not buying individual stocks, of course...

All I have is a checking account--i.e., no investments, period. I know next to nothing about investing.

Let's say I've got $10,000 to invest. I've been looking at some Bogle-heads stuff, and it's making me wonder: is now a good time to invest in an index fund? Let's assume that we're near the bottom of the Dow trough (of course, who knows): would buying shares of an index fund now allow you to benefit from the--hopefully--inevitable recovery in the market, even if it's months or years down the line?

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[michaelrack]

I think the broad market indices are going to decline approximately 15% more before hitting bottom. I believe this will happen near the end of October. Once the Dow drops below 7500, I would recommend gradually moving your money into a stock market index fund or ETF.

Given the recent strength of the US dollar and its likely future decline, moving some of your money into international fund is also reasonable. I agree with phatib's assessment regarding China and Russia.

 

[drfunktacular]

I think the broad market indices are going to decline approximately 15% more before hitting bottom. I believe this will happen near the end of October. Once the Dow drops below 7500, I would recommend gradually moving your money into a stock market index fund or ETF.

Given the recent strength of the US dollar and its likely future decline, moving some of your money into international fund is also reasonable. I agree with phatib's assessment regarding China and Russia.

I'm a little baby investor, so I'm not super-sophisticated with this stuff, but I do have some cash I could stick somewhere medium-term. Let's say your hypothetical proves true and I am investing right at the bottom on the last day of October--what about the idea of putting some amount of it in a fund-of-funds that includes a bit of everything, including internationals? I'm not really interested in any kind of hyper-risky thing trying to get rich; I just want my piece of the action on the upswing , and get some degree of bond-type hedging against wild swings .

 

[mgdsh]

The market doesn't finally bottom until housing does and we're no where near a bottom in housing.

 

[michaelrack]

I'm a little baby investor, so I'm not super-sophisticated with this stuff, but I do have some cash I could stick somewhere medium-term. Let's say your hypothetical proves true and I am investing right at the bottom on the last day of October--what about the idea of putting some amount of it in a fund-of-funds that includes a bit of everything, including internationals? I'm not really interested in any kind of hyper-risky thing trying to get rich; I just want my piece of the action on the upswing , and get some degree of bond-type hedging against wild swings .

that would be fine. If you have access to vanguard funds, you may want to do something like 50% Total Stock Market Index, 20% Total International Stock index, and 30%Total Bond Market Index.

 

[michaelrack]

We're nearing the market bottom. I stand by my 10/11 recs.