Do you keep deposting money into IRA while "market crashes"?

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thelateinvestor43
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Do you keep deposting money into IRA while "market crashes"?

Post by thelateinvestor43 »

If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
shess
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by shess »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Every year, you have the option to put money in. When that year is gone, the option is gone. Presumably someday the market will come back - would you prefer to have money in your Roth then?

Actually, a more compelling way to put it is Warren Buffett style - if you were willing to buy the tomatoes when they were expensive, why are you suddenly reluctant to buy them when they get cheap? Buying across a market crash is the PERFECT time to be investing Roth IRA money, because that means you should expect more gains going forward.

And if that doesn't convince you ... you can invest in fixed-income or money-market funds in a Roth IRA. The state of the market is entirely independent from whether to put money into an Roth IRA.
mhalley
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by mhalley »

Continuing to invest when the market goes down is the best time to invest. You get more shares for the same amount of money. People in the early accumulation phase should welcome a correction.
Corrections are a normal part of the market cycle.
Some market history from WCI:
the stock market drops by 5% or more about three times per year, by 10% or more (a correction) about once per year, and by 20% or more (a bear market) once every 3-4 years. Over your 60 year investing career (30 years working and 30 years in retirement), you will need to go through about 60 corrections and 20 bear markets. Might as well get used to it. This is normal market behavior.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by RamblinDoc »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
If you have a long Investing horizon (5-10+ years), yes, you keep investing according your your plan. The dips potentially yield the bigger gains if the market recovers. Personally, I hope a correction occurs- the sooner the better, as I expect to invest for quite awhile. On the other hand, Investors in retirement who are withdrawing from their portfolio tend to dislike corrections - hopefully their asset allocations are adjusted to reflect their ability to handle risk and the unique needs of their portfolio.

As noted above - you have a finite amount of tax sheltered/deferred space each year. Don’t waste it.

I suggest that you read more about the market before jumping in. Perhaps JL Collins’ Stock Series (especially part 1).

https://jlcollinsnh.com/stock-series/

The Bogleheads Wiki is also excellent. There is a “Getting started” section.

https://www.bogleheads.org/wiki/Getting_started

Best of luck on your adventures!
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by rossington »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Absolutely, you are planning for the future not the present.
Buy at cheaper prices!!!
You would not do it only if you cannot afford to.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by bltn »

As discussed above, a market correction is a buying opportunity. Market corrections are the reason dollar cost averaging is so successful as an investment strategy.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by GoldenFinch »

A market crash is best time to invest. Unfortunately though, most people get scared when the market crashes and hold on tight to their cash and bonds. Instead they wait until the market gets to all time highs to start investing again. It’s called buying high, which isn’t a good strategy. That’s why “set it and forget it” automated investing is the way to go. Your money gets invested on a regular basis without regard to an emotional decision that involves current events, media noise or whether the market is falling or soaring. Automating diminishes behavioral errors.
AllMostThere
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by AllMostThere »

Yes, best time to buy is when the market is on-sale! Another forum member mentions Warren Buffett, so I couldn't resist my two favorite quotes from him about buying in down markets.

"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."
"The best chance to deploy capital is when things are going down."

- Warren Buffett

Lastly, the value of staying the course:

"Someone's sitting in the shade today because someone planted a tree a long time ago"
- Warren Buffett
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Watty »

During the 2008 financial crisis I not only kept contributing money to my 401k but I also increased my savings as much as possible since my I was in my 50s and did not have a long time until I would need to retire.

When the stock market recovered the extra contributions did very well and allowed me to retire a bit earlier than planned.

It may seem counterintuitive but during your accumulation years you really want the stock markets to be low so you can buy stocks cheap. For example if you had a magic wand and could control the stock market on the day that you invest your 2019 IRA contribution then you would make the stock market as low as possible to be able to invest at the best price possible.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by bei22000 »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
since most people can't predict the "dips", I normally do DCA. If seeing a 5% correction, I would buy more.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Brianmcg321 »

Absolutely. That’s when everything is going on sale.

Take a tip from Old Mr. Potter in “Its a Wonderful Life”. When everyone else is panicking, he’s buying for pennies on the dollar.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Dottie57 »

Watty wrote: Thu Nov 21, 2019 6:15 am During the 2008 financial crisis I not only kept contributing money to my 401k but I also increased my savings as much as possible since my I was in my 50s and did not have a long time until I would need to retire.

When the stock market recovered the extra contributions did very well and allowed me to retire a bit earlier than planned.

It may seem counterintuitive but during your accumulation years you really want the stock markets to be low so you can buy stocks cheap. For example if you had a magic wand and could control the stock market on the day that you invest your 2019 IRA contribution then you would make the stock market as low as possible to be able to invest at the best price possible.
Same story for me.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Wiggums »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Yes, I do invest. Great wealth is made when the market down significantly. I buy to my AA.

I want a strong, healthy economy too. Buy low, sell high.
Last edited by Wiggums on Thu Nov 21, 2019 9:16 am, edited 2 times in total.
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JoMoney
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by JoMoney »

Having an IRA, or putting money into an IRA, doesn't mean it's invested in the stock market.
An IRA is simply a tax deferred account that can be invested (or not) however you want.
It wouldn't be my choice, but you could have an IRA invested entirely in FDIC insured bank CD's that never lose a penny.
That said, yes I would likely continue to invest in the stock market (even inside retirement accounts) while the stock "market crashes".
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Stinky »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
If/when the market crashes, stocks are "on sale".

I like to buy things that are on sale. Especially stocks. :moneybag
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by retiredjg »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Don't ever think it won't happen. It will happen, it will probably happen to you several times. That is why you must always invest in a way you can be comfortable with even in the bad times because bad times are not avoidable.

Absolutely continue to feed your Roth IRA during the bad times. Remember that you are buying shares, but during a downturn, each share just costs less. No reason at all to stop buying. In fact, buy more if you can. :happy
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by CyclingDuo »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Yes, and your 401k/403b/457b as well. :beer
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by retired@50 »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Yes. Doing so will lower your average cost of whichever fund(s) you're buying and will likely lead to satisfaction over the years between now and retirement.

Regards,
This is one person's opinion. Nothing more.
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Mullins
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Mullins »

I do. If you believe with full faith and confidence the market will recover someday, not only that but go on to new highs, then a current down market is a buying opportunity.

If you don't believe the market will ever recover and go on to newer highs, then why are you in the market?
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by ruralavalon »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Yes.

If stock prices go down, then continue to buy at bargain prices.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by UnLearnYourself »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Yes. Dollar cost averaging. Ultimately shares are purchased, which will theoretically eventually rise back up, so might as well keep buying on the cheap. And one only has so many years to contribute so I want to max that our regardless of market conditions.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by illumination »

I really regret not having the same mindset in the past I do now where I basically try and get my contribution in Janaury and have it invested as soon as funds clear every year. And never worry about when to buy for the rest of the year. It's worked so much for me than when I would wait in cash for the perfect "down" time to deploy the money.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by MotoTrojan »

If the market really dives I would cut back on spending to invest more actually. I do find it funny when people say they have cash on the sidelines waiting to invest after a 10% drop; it may feel good to dump the money in on a day when the markets get smashed, but often times it falls back to a price it was at within the last year, when you still had that cash sitting on the sidelines...

Invest as much as you can, as soon as you can, and don't look back.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by vipertom1970 »

After 22 years of maxing out my 401k with weekly contribution, I hit over 1 million. To me a crash=blue light special and yes I went through the great recession.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Cubicle »

Market "crash" = market "sale". Yes, keep buying.

But I don't do any of this in my Roth IRA or 401K. I buy at whatever the prices are on January 4-6 on each year. I have no idea ifs its a high or low price relative to the past or future. My taxable accounts I buy whenever I transfer money over.

The prices usually drop by 8-10% the day after I buy things in any of my accounts, at any time of the year. That's the only consistency I can find.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by celia »

Don’t you prefer to buy things when they are “on sale”?
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Ferdinand2014 »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
It will happen. 100%. It is good news if it crashes and you have 20+ years to go. Always good to buy on sale.

You need 2 things:
1.) The belief that the market will eventually recover. Meaning that you believe in the future of human ingenuity.
2.) Enough cash so others do not determine your fate - Warren Buffett. Meaning a market crash does not force you to sell.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Blake7 »

If you have the money available, max out your Roth IRA every year, even if you put it in a money market fund inside your Roth. You can never get that space back if you miss the opportunity. The advantages a Roth has over a T-IRA, especially in conjunction with a T-IRA once you start making withdrawals, are significant. That said, +1 on the investing advice above!
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Caduceus »

Yes, and you should be happy about it. Stocks are going on sale.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by heyyou »

Yes, because of the following reasons:
An IRA is for retirement spending. By then, the price differences during this decade will seem inconsequential, in that they will all look like bargains, even the highest cost ones, and even more so the lowest cost ones. I retired sooner from the gains on my piddly contributions made in the 1980s, since the S&P500 had grown by 18 multiples since then. No one was forecasting that, during that decade.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by 1789 »

That is the plan in for next recession. Trying to keep some extra cash always for this purpose. The goal will be try as much to stay in our jobs and if we can then use extra cash to buy stocks.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Just sayin... »

I plowed an ever-increasing percentage of my income into all accounts (IRA, Roth, Taxable Brokerage, Deferred Comp, Employee Stock Purchase Plan) through three major downturns and several upturns - all in preparation for retirement. I didn’t ever reduce contributions due to market conditions. For me, this worked out well.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by JW-Retired »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Wasn't eligible for a Roth but I sure still fed money into my 401k. I kept up feeding the max contribution amount possible into the 401k and switched all these new contributions to 100% equities. I didn't do any re-balancing beyond that. I did some tax loss harvesting but that didn't change my equity percentage. Aside from the tax-loss harvesting I just peacefully watched, and let the market do whatever to my AA.

My previous experience in the 90's was my judgement about when to re-balance was sub-worthless.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by arcticpineapplecorp. »

if you were happy to buy stocks at higher prices, wouldn't you be even happier to buy more shares at lower prices?

If you like buying stuff when your favorite store has a sale, why don't you view the stock market as having gone on sale?

There's an old saying that the stock market is the only market I know of that everytime the store goes on sale people run for the exits.

Buffett also said, "Be greedy when others are fearful".
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by Daryl »

I've been making the maximum contribution to my IRA on the first trading day of the year. This year I'll be buying a bond fund since equities have been doing so well lately and I want to get back to my target allocation.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by dru808 »

I like to assume I will. I tell myself I will, how would I feel in 2000-2002 contributing to a negative return account? 😐
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by KlangFool »

OP,

If you cannot do that, you should not be in the 3-funds portfolio. I am 100% Wellington (65/35) fund for my Roth IRAs. I do not care whether the market is up or down.

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Re: Do you keep deposting money into IRA while "market crashes"?

Post by GerryL »

During 2008-2009 I could hear the screaming and see that people's hair was on fire. But I had no idea where I could put my money that was any better than where I was already putting it. So I embraced my ignorance and just kept doing what I had been doing: maxing 401k and Roth, with no change to AA. Have never regretted that decision.

At this point I did stop the monthly $150 extra on my mortgage so I could build up cash -- just in case -- since jobs at my company were disappearing.

Now gainfully unemployed (read: retired).
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by CoastalWinds »

When investing, I focus on how many shares I can buy. So when the market crashes, I feel better. Now, if only it would crash!
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thelateinvestor43
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by thelateinvestor43 »

I see that the last S&P "crash" occured on Dec. 21, 2018?


So theoretically from 2007 to 2008 some people lost everything?! :shock:

I see that in 2008 we resembled 1993! So it was like going all the way backwards with "your" money invested??

Looking at a historical chart of the S&P online has really done it for me!

I now see why long term and "staying the course" works out if you analyze the long term trends on the chart, but I guess it really isn't set in stone though!

Anything could happen. I see that we've been on an upward trend lately, but of course who knows when the next down turn will happen?

Hey I guess there are no guarantees in life! .... save for ....... death and taxes! :D
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by GMCZ71 »

thelateinvestor43 wrote: Sun Nov 24, 2019 4:54 am I see that the last S&P "crash" occured on Dec. 21, 2018?


So theoretically from 2007 to 2008 some people lost everything?! :shock:

I see that in 2008 we resembled 1993! So it was like going all the way backwards with "your" money invested??

"staying the course" works out if you analyze the long term trends on the chart, but I guess it really isn't set in stone though!

who knows when the next down turn will happen?

Hey I guess there are no guarantees in life! .... save for ....... death and taxes! :D
Scanning thru your profile posts I get the feeling you are scared to put money in the market?

"from 2007 to 2008 some people lost everything?! :shock: " No they did not... They lost $ value but still had the same number of shares. From that point on each share was on sale and they could double the number of shares one owns in a shorter time period by purchasing more each paycheck and dividends reinvested.

Do you have access to a 401k at work? You are just beginning with investing and should actually be hoping for downturns in the market, its when your close to retirement you hope for calm markets.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by yangtui »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
The market will definitely crash again at some point! If and when it does happen I will still contribute the max to my Roth.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by ruralavalon »

thelateinvestor43 wrote: Sun Nov 24, 2019 4:54 am I see that the last S&P "crash" occured on Dec. 21, 2018?


So theoretically from 2007 to 2008 some people lost everything?! :shock:

I see that in 2008 we resembled 1993! So it was like going all the way backwards with "your" money invested??

Looking at a historical chart of the S&P online has really done it for me!

I now see why long term and "staying the course" works out if you analyze the long term trends on the chart, but I guess it really isn't set in stone though!

Anything could happen. I see that we've been on an upward trend lately, but of course who knows when the next down turn will happen?

Hey I guess there are no guarantees in life! .... save for ....... death and taxes! :D
No, in 2007-08 people did not "lose everything".

The 2008 crash was terrifying. I was less than 3 years from my intended retirement date, and was very afraid.

In 2007-09 I continued my regular contributions every period investing in stock index funds, and also invested bonuses in stock index funds.

In spite of of the crash I was able to retire as planned in January 2011.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by dcabler »

thelateinvestor43 wrote: Thu Nov 21, 2019 1:43 am If (hopefully it won't happen) the market crashes would I continue to still feed money into my Roth IRA?
Sitting here on the 25th of November, 2019 in relative comfort, my answer is "yes I would continue". That's not what I did in 2008, however. I paused automatic deposits into my 401K until late spring 2009. Wish I hadn't, but I panicked.
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Re: Do you keep deposting money into IRA while "market crashes"?

Post by mmmodem »

thelateinvestor43 wrote: Sun Nov 24, 2019 4:54 am I see that the last S&P "crash" occured on Dec. 21, 2018?


So theoretically from 2007 to 2008 some people lost everything?! :shock:

I see that in 2008 we resembled 1993! So it was like going all the way backwards with "your" money invested??

Looking at a historical chart of the S&P online has really done it for me!

I now see why long term and "staying the course" works out if you analyze the long term trends on the chart, but I guess it really isn't set in stone though!

Anything could happen. I see that we've been on an upward trend lately, but of course who knows when the next down turn will happen?

Hey I guess there are no guarantees in life! .... save for ....... death and taxes! :D
I started investing in a 401k and Roth IRA at the beginning of 2008. It was really difficult to invest in stocks while the rest of the world as panicking. Since I was young, I went almost all stock. The first couple of years, I remember my investment return was negative.

A little over 10 years later, I now have ~$500k after investing only in my combined 401k and Roth IRA. Imagine that? In no way did I expect ~$20-$25k year tax advantaged investing would net half a $M in so short a time. As others have already said, when the market is down is the best time to invest.

How would I feel if the market crashed tomorrow? I'm hoping I would feel fine. We'll see. I was able to maintain buying throughout the last downturn despite doom and gloom. A lot of friends and coworkers talked about pulling stopping investments and going to cash. I also didn't have much to lose, so it was easier to stomach.
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