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Never Lose Investing

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After careful investing, I lost 1/3 of my savings and IRA's in two major stock market crashes, so I learned this simple system and never lost money again. I keep all my money out of the market until there is a major crash (below 8000). Then I buy a no-load Stock Index Fund. I may wait years, but when the Dow reaches 10,500, I sell immediately and stay out of the market until the next major crash, then do it again. You might feel comfortable with a different magic sell number--10000 maybe?

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Even though this system has never lost, it is because I never got greedy. I do not try to guess when the market will hit its lowest, or its highest, I just go by my moderate magic numbers. I also never invest more than half my savings. Whoever said "buy low, sell high" meant it.
- Submitted by LOLAINSC 10/7/2010 in Saving Money | 3 Comments
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Member Comments

LOLAINSC 10/15/2010 10:40:00 PM

    If the market crashes again before you reach your chosen sell price, do nothing, sit tight until it does get there and you will have no losses--we're talking Stock Index Funds only. I never said you would get rich, the gain is modest since you are investing only a fraction of your assets and your chosen sell number is conservative, not greedy. Yes, a stockbroker would be fired for giving this advice since it profits the client but not the brokerage house. Investing involves common sense and basic math. If I invest a dollar a point in a Stock Index fund at a DJIA of 8000 and sell at 10,500, I have made $2,500 dollars. This is not "100%" hindsight, but mathematical reality. How often do crashes happen--frequently. True: be careful with any investing--buy low, not high--bull markets often reflect psychology more than economic reality.
LADY_KATHY 10/8/2010 9:28:00 PM

    "never" is a word that can't apply if this scenario.. what if the market crashes before the "magic" number. Wouldn't everyone be rich if this were true.. and how many times in one's lifetime does this really happen? I would be fired as a financial counselor if I offered this advice. the stock market is 100% hind site... be creful with ANY method of investing.
SMITHANI 10/7/2010 3:08:00 PM

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