Bad time for index funds?

[surftheiop]

This is unrelated to my BP post-

But i have a few thousand dollars im looking to invest in indexes (I plan to hold for my four years in college). Is this a bad time to enter the market? Ive heard alot of talk in the media about a likely recession and the such.

[Shoe]

It is never a bad time to enter the market (or atleast not in anyway you can predict). Your young, your stocks will go up over time unless something like the end of the world happens, in which case you are screwed anyways.

[kimchi]

[ QUOTE ]
This is unrelated to my BP post-

But i have a few thousand dollars im looking to invest in indexes (I plan to hold for my four years in college). Is this too short a time to be in the market? Ive heard alot of talk in the media about a likely recession and the such.

[/ QUOTE ]

You'd be better of with some short-term bonds and cash over 4 years. Maybe is small % in stocks if you have the stomach.

As for 'when to buy' The best time to generally invest is whenever you have the money.

[surftheiop]

When i said 4 years, i meant 4 years absolute minumum. I hope not to mess with this and whatever i add until i need a house downpayment or the such

[dazraf69]

[ QUOTE ]
Ive heard alot of talk in the media about a likely recession and the such.

[/ QUOTE ]

Just out of curiosity, for a young investor who is looking at index funds. Wouldn't a recession actually be beneficial as the market trades at a discount leaving potential for growth? ( i use the term discount loosely, i mean in terms of economic cycles, a recession is the time to invest)

[scott1]

[ QUOTE ]
[ QUOTE ]
Ive heard alot of talk in the media about a likely recession and the such.

[/ QUOTE ]

Just out of curiosity, for a young investor who is looking at index funds. Wouldn't a recession actually be beneficial as the market trades at a discount leaving potential for growth? ( i use the term discount loosely, i mean in terms of economic cycles, a recession is the time to invest)

[/ QUOTE ]

Possibly, but how do you know when it's at the bottom? How long will it last?

[john voight]

im in the same exact spot.

I have 3k sitting around collecting dust + 2 more (in my BR) collecting dust.

I am very hesitant to put it into the US market though, mainly b/c I am a noob, and I feel putting money in @ all time highs is worse (longterm) then putting money in at lows (2000).

Problem is; you cant just sit and wait for the the stocks to fall (unless your a genius who knows what he is doing). Any advice on how to minimize risk when dealing w/ such buull markets?

[DesertCat]

[ QUOTE ]
Is this a bad time to enter the market? Ive heard alot of talk in the media about a likely recession and the such.

[/ QUOTE ]

I too have heard such talk for many years. I've found the media is always right eventually, same as a stopped clock.

If you plan to buy a house within 4 years, the volatility of the stock market is likely a bad choice for your savings. I'd recommend a commitment of at least 5-10 years if not more. If you can split your portfolio into long term (decades) savings and short term (less than decades) you can use index funds for the former and moneymarket/bond funds/CDs for the latter.

[eastbay]

Someone might want to double check my numbers on this as I spent 2 minutes on it, but:

Considering 100 years of daily data, it seems like if someone invested in the Dow only on all-time highs, they'd be up on average about 11.4% one year later. If they invested in the Dow only on days that were not all-time highs, they'd be up on average about 9.7% one year later.

The point being that it isn't clear that indices being at all time highs is in and of itself a clearly bad time to get in.

eastbay

[surftheiop]

ldo ?

we are not in the recession yet... so wouldnt it be couterproductive to invest if one was coming shortly ?