Because I believe this economic crisis will end within the next few years or sooner, I took today’s 777+ point decline in the Dow and 8.8% decline in the S&P 500 as a sign that the stock market, as a whole is on sale.
I opened an individual brokerage account at Vanguard after market hours today, in which I invested the minimum $3,000 in VTSMX, the Total Stock Market Index Fund. The trade will probably be effective at the end of business tomorrow, but I’m not sure if I’ll get today’s price (which has not been set yet) or tomorrow’s price. If I get tomorrow’s price, I might miss gaining from a rebound that the stock market might experience tomorrow.
Market timing is risky, but investing right after relatively large drops is more likely to be an opportunity in the long run. The $3,000 is not money marked for retirement, it is from money set aside for some of my more intermediate goals.
Are you taking advantage of the stock market decline? Is it too risky to try to time the market right now?
Updated February 6, 2012 and originally published September 29, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.