I recently posted a guest blog entry at the Generation X Finance blog entitled Price Drops are Good for Young Investors in the Stock Market.
Juicy Excerpt: The answer is to learn how valuations affect long-term stock returns, to lower our stock allocations to more reasonable levels, and to come to appreciate the long-term benefits that come from big price drops starting from the sorts of price levels that apply today. You’ll view big price drops very differently when your stock allocation is lower. Those with reasonable stock allocations are able to see that low stock prices are the key to long-term wealth accumulation.
There were several good comments filed in response to the blog entry.
Juicy Excerpt: Agree with the premise and all the comments so far, but the original poster is (in a not so subtle way) advocating market timing. There’s an inherent contradiction here: you can’t take advantage of lower prices through the dollar-cost-averaging long-term investing philosophy if you’re waiting for the “Stock Market Predictor” to tell you what to do. Thanks, but I’ll pass.
Today’s Passion: If you want to know more about our unique investment return calculator, please consider checking out the article entitled About Our Unique Investment Return Calculator.