Saturday, July 28, 2007

stocks fall

i know it's been a while since i posted -- been busy with work, vacation, and i managed to throw out my back some how -- but i wanted to jump in and say a little something about the stock market's fall this past week. the dow had it's worst week in 5 years and the other major indecies were decidedly lower as well. so, should we panic? pull our money out of the markets while we can? no and definitely not!

perhaps it's time to keep a little more money in cash. perhaps it's time to sit on the sidelines and wait and see.

if you're me, you just keep plugging along and keep investing just as always. you've been dollar cost averaging over the long haul and this little blip won't make any bit of difference. and, if you've got a lump sum turning to cat food in your bank account, put it into play. i happened to be reading scott burns the other day and he had a particularly pertinent article:

One of the best exercises to demonstrate this was done years ago by the American Funds group. They told the story of two investors. One had an uncanny knack for selecting the best day of the year to invest – the day prices were lowest. The other had an uncanny knack for selecting the worst day of the year to invest – he unerringly invested at market tops.

At the end of a 10- or 15-year period of annual investments, there is very little difference between the two investors. What is important is that they have invested over a long period of time.

so, if you're me, just keep plugging along. in 10 or 15 years, this dip won't even be a blip on the radar.

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