Historically, those who sent in their IRA contribution early in the year did better than those who DCA or sent in at the end of the year. I wanted to bite the bullet and put the fund in my saving account into the IRA, but with the state of the economy I expected the stock price to sink this year. After much debate, I decided to keep the current $100 biweekly and sent in the rest today. Price right now is almost equal to the beginning of last year so it's a good time to buy. Everything is getting too expensive, even retirement funding. Coming up with that extra $1,000 is really stretching my budget.
A compromise of sort
January 5th, 2008 at 10:57 am
January 5th, 2008 at 07:50 pm
I mean, exactly what kind of people are the ones who would send in their IRA money early anyway? My guess is that they're probably ones that are financially aware to begin with.
On the other hand, people who DCA throughout the year may not be as aware. Of course, I'm only speaking in generalities.
Still, I too have pondered about the state of the economy right now, and how since I don't think it's bottomed out in a recession yet, contributing to taxable investing could be a short-term loss....
I'm only bringing this up because, according to your links, it seems that you may be into stocks like me....
I'm mostly just thinking out loud, but my personal opinion is to simply not even worry about it with retirement funds, because the long horizon will smooth out the bumps. For shorter term taxables though, I'm tempted to wait to see if economic conditions don't worsen first throughout the year, before I jump in.
That and I have to build up my funds first, so I have to wait anyway.
January 6th, 2008 at 10:13 am
As for taxable account, I'm planning to purchase a stock I've been following for nearly a year now. 2008 is going to be their worst year and it's not just an expectation, more like looming reality. Hopefully it won't plunge all the way into penny stock. I almost caught it last year when it went to $2.99 from a high of $10, but my risk averse nature had already planned for this year and I wasn't ready for it.
January 6th, 2008 at 08:37 pm
As for stock picks, I agree that it would be foolish not to take recession into consideration. Personally, I would focus on stocks that are either recession-resistant (such as pharmaceuticals or staples, and even some stocks like Coca-Cola and American Express), or stocks that tend to thrive in a bear market (such as gold, oil, bonds, or even some stocks like Walmart).
But most importantly, once the recession gets into full swing, I think it's important to find good bargains of stocks that you want to buy and hold.
Again, just rambling.