Read some blogs and books. The info is out there. I read a few financial books a year, most are good reads.
This strategy has always confused me. How can the bulls invest in the downturn when they are already fully invested? Margin what's left after you get creamed?
Generally someone using this strategy would be investing more money weekly, almost ignoring the peaks and valley's of the market.
You did not answer the question. Presuming a bull is already 100% invested, and gets creamed in a downturn, where does the money come from to invest even more in the downturn?
It depends on your risk management. Some people don't continue to invest when their margin goes below 90% to have a "cushion" for "capital safety".
Reallocation from other investments, or money from whatever job this person has. Depending on age, I'd imagine older investors have a more conservative portfolio especially if there is no work related money coming in, and younger investors would most likely still have work income to invest. My example was of someone investing money with each paycheck regardless of market performance.
It's not really that big of a gamble, the market trends up, if history holds true I'll end up well ahead than if I just held on to my money.
Your view of history is rather short term. There have been periods where you would not recover from a correction for 30 years. Most people do not have that time horizon.
My bad, I'm in my mid 20s, but if I'm not mistaken even after the great depression the market rebounded in under 10 years. 30 years seems to be a bit of a stretch.
http://money.cnn.com/2015/02/26/investing/stock-market-crash-bubble-investing/ Apparently even the great depression only took 7 years to recover from. If you invest in index funds and high yield dividend stocks then you'll be fine. As i said, 30 years seems to be a bit of a stretch.
Sorry I should have specified. I was talking about S&P 500 with continued investments. Even so with dividends actual recovery time would be less then the time to get back to the old peak. Yes, if you invested in just the dow 30 it without more investments, it would have taken a long time to recover.
The stock market can be a great investment, but it is not fool proof. You can also lose a lot of money if you are not careful. There is a time to sow, and a time to reap.
