Practicing in the areas of wills, trusts, and estates for selected clients in the Commonwealth of Pennsylvania and with your local counsel through out the United States.
As regular readers know, this section of the site is generally deicated to techniques of asset protection. However, maintaining assets in a down market and growing assets through time is a significant part of building and preserving wealth. So today's article will review the timely and yet evergreen question of "How fast to go back into the market."
When financial markets are bad, the question of when to enter is important- especially if you left or diminished your equities at some point on the way down. And, whether or not you are a dollar cost averaging investor, the decision is vital. Why?
Often, bear market rallies draw investors back into the markets before the real recovery has begun and more losses can be sustained. However, if you are too passive, the real bull usually comes on so quickly that many investors who withdrew from a bad market miss the rebound are start growing their wealth again from a highly dimished base or foundation.
Behavioral financial studies have shown, and human nature more generally supports the finding that investors fear of loss exceeds their desire for finacial gain. As humans, we like homeostasis (or keeping things just as they are). So given this what is an investor to do?
Well, the financial firm Berstein has recently published an article right on point. It is available at Berstein - Jump In or Go Slow? Strategies for Entering The Market.
You can also download the article on when to invest to protect and grow your assets here.
This brief six page article is full of ideas, analysis and practical information. Enjoy and keep your ideas, comments, and questions coming. Thank you.
David M. Frees III, Esquire - practicing in the areas of wills, trusts, estates, and asset protection in Pennsylvania
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