Well, I had fun *trying* to time my periodic purchases with the dips. However, per my first post in this thread, I was actually less successful with my attempts to time my purchases every week to two weeks than my girlfriend, who invested sporadically and made no such attempt to time her purchases.

The end result was that I benefited purely from sticking to investing aggressively throughout the crash, and the failed attempts to pick out the very best days to buy didn’t really matter much in the long run. I really don’t think there’s any way to time your purchases successfully; it’s just more important to stick with your investing plan and keep making the purchases through thick and thin. (But if you have fun trying to time them, no harm done, as long as you’re not holding out a very long time waiting for the market to tank to buy.)

As far as timing those VTSMX purchases in 2010: I’m afraid I have no reliable crystal ball, but you can think of it as having two options. (1) You can go all-in with your $10k at the start of the year, and put your trust in the fact that, on average, two out of every three years the market ends higher, so the odds are in your favor. Or (2) you can alleviate any worry about the risk of the market tanking right after you invest by staggering your purchases, either on a set schedule or attempting to buy on the dips as I did.

The important thing, however, is to actually invest. Thirty years down the road, it won’t matter if you managed to catch a one or two day dip, just that you consistently invested when you could.

Best,
Dan

If you look up VTSMX on finance.yahoo.com and click on the graph, and then change the dates to display from 2000 to 2004, you get a pretty good look at the bottom of the last bear market.

I’m not sure there was such a point in early 2003 – even if you consider looking at broader time periods – that I would have been able to distinguish the genuine comeback from all of the upward “dead cat” bounces that had occurred from 2000-2002.

And by the time we’d have had the advantage of hindsight to know a bottom really had passed, (1) we’d already be a good part of the way back to 2000 numbers and (2) there still would never be a guarantee the market wouldn’t just drop back down at any point. In fact, you could say that the market did just that in 2008, several years later.

My personal opinion is that I will do better regularly investing and accepting the average price over the entire period the market falls rather than trying to wait for some signal. Others may be better at finding the “consensus comeback” signal than I am, but my preference is to take that average price on the way down.

Another alternative is to setup an “alert” on the value of the mutual fund so that you get an email or cell phone text message notice if the fund hits a certain level. You can use Yahoo to do so at alerts.yahoo.com I’m sure there are other services out there that will send you a notice. At least that way you won’t have to watch the prices every day and you can get an automatic notice if the fund hits a certain trigger point (high or low).

Jim

However, many ETF’s (even from Vanguard) follow the same indexes as index funds. These trade like stocks, so limit orders can be used.

I’m guessing you probably are aware of it but they just don’t allow this on Vanguard for some reason.

Some might have thought the Election Day rally was it, but nope.

Maybe a 10% one-day gain is the comeback signal? No, wait, that already happened on 10/28, and then 10/13 before that. That’s not it.

I’ve got it – how about three straight days of gains? Darn, that happened too. Nope.

The good and bad thing about the market is, when it comes to a consensus, it’s priced in immediately. Once a consensus has been established, it’s reflected in the price, and the once-cheap price is gone.

One of these days, there will finally be some good news, and I mean good news that sticks about the potential for companies to make money in this economy. When that happens, the market will react immediately and not turn back for any who missed the buying opportunity.

Probably best to keep investing at your normal pace and accept the average share price over any given period rather than trying to time things perfectly. (But I still feel like I gotta try to catch the dips though! I’m my own worst enemy…)

Meanwhile, my girlfriend doesn’t have a money market. She ACH’s from her checking to Vanguard, which takes two business days, which eliminates the possibility of trying to time buys with the dips.

Guess which one of us has managed to buy at the lower prices?

Apparently, a monkey throwing darts could do better than I’ve done. I buy on days when the equivalent ETF’s are all going down, and immediately after I place my order they recover at least somewhat. Then the next few days they sink more.

She buys on a day the market’s roaring, and I’m like, “You missed it, baby…” But then the market tanks for two days straight and she gets a way lower price.