Invest now or wait for the correction [Czech Republic]

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TheEzuri
Posts: 1
Joined: Sun Mar 01, 2020 3:19 pm

Invest now or wait for the correction [Czech Republic]

Post by TheEzuri »

Hi guys, Ive got a question.

I have finally managed to set up a bearable portion of my income to monthly investing into ETFs. Im from the Czech Republic, it is not much to invest, (around 220 EUR or 260 USD per month) but its a starting point.

I have purchased some IWDA/EIMI combination and thinking about directing it to the VWCE as this ETF operates in EUR currency and the future path will lead Czech to be using the EUR currency as well.


THE MAIN QUESTION:
It is clear that an economic correction is coming our way, COVID-19 is just the trigger, though some sort of correction was coming our way anyway, I hope we can agree on that.
With my humble 220EUR monthly contribution, would you agree it might be a better optiion just to stock the cash on the IBKR account and wait for the correction to come and then use the accumulated cash to buy ETFs? Or do you think waiting is just wasting time?

Currently my portfolio is about 30% ETFs and about 70% cash as Ive been waiting couple of months now.

Thank you very much.
imperia
Posts: 221
Joined: Tue Feb 21, 2017 6:31 am

Re: Invest now or wait for the correction [Czech Republic]

Post by imperia »

Stay the course!
domybit
Posts: 8
Joined: Tue Sep 22, 2020 8:41 am

Re: Invest now or wait for the correction [Czech Republic]

Post by domybit »

Whether it's a one-off sum or a monthly investment, trying to time the market is problematic unless you are very lucky or a technical analysis wizz.

If you invest your regular monthly sum, you benefit from volatility by means of dollar (or euro) cost averaging, meaning you buy fewer shares when the price is high, and more shares when the price is low, reducing the average cost per share.

There is a method called "twinvest", which is "dollar cost averaging on steroids", where your monthly investment is split between your investment instrument and cash, and the amount you put in the investment instrument goes up as its price goes down, in accordance with a simple formula. The important thing is that you are reacting to the market price, not trying to predict the future.
You can see a brief description of twinvest at:
http://dividendyieldinvestor.blogspot.c ... nvest.html

I have used this over the years and it worked very well.
finrod_2002
Posts: 47
Joined: Fri Feb 15, 2019 6:04 am

Re: Invest now or wait for the correction [Czech Republic]

Post by finrod_2002 »

time in the market beats timing the market :sharebeer
Oceanlon
Posts: 2
Joined: Tue Oct 06, 2020 4:11 pm

Re: Invest now or wait for the correction [Czech Republic]

Post by Oceanlon »

What is your time horizon? Also you don't seem to have an asset allocation defined?
glorat
Posts: 684
Joined: Thu Apr 18, 2019 2:17 am

Re: Invest now or wait for the correction [Czech Republic]

Post by glorat »

TheEzuri wrote: Sat Oct 17, 2020 4:33 pm It is clear that an economic correction is coming our way, COVID-19 is just the trigger, though some sort of correction was coming our way anyway, I hope we can agree on that.
Let's assume I agree that an economic correction is coming. Economy != The Market. There is surprisingly little correlation between the two. Also, given the (assumed) fact that the correction is coming, this will be priced into the markets already so when the expected economic correction comes, the market will unaffected (all things being equal).

Now let's also assume that what you meant is that a market correction is coming our way. This time I will agree with you!!! A correction is coming, and so is a crash. But unfortunately, I don't know when it will happen or if the market will keep going up until it happens. I recommend reading this:
https://jlcollinsnh.com/2012/04/15/stoc ... -save-you/
xxd091
Posts: 200
Joined: Sun Aug 21, 2011 4:41 am
Location: UK

Re: Invest now or wait for the correction [Czech Republic]

Post by xxd091 »

Take it from an old -74- there is never a good time to invest
Get started as soon as possible so compounding can do it’s thing
Your age minus10 in bonds might help you keep on investing and sleep at night in that the volatility of the portfolio will be reduced to acceptable levels
Over my investing life I have seen at least four major corrections-they are part of the investing landscape-so will you probably
Just keep investing
In major corrections you money buys more units ad vice versa
No one can predict the future-you just have to believe in the human ability to succeed
xxd091
UpperNwGuy
Posts: 4120
Joined: Sun Oct 08, 2017 7:16 pm

Re: Invest now or wait for the correction [Czech Republic]

Post by UpperNwGuy »

TheEzuri wrote: Sat Oct 17, 2020 4:33 pm It is clear that an economic correction is coming our way, COVID-19 is just the trigger, though some sort of correction was coming our way anyway, I hope we can agree on that.
I disagree.
tibbitts
Posts: 11930
Joined: Tue Feb 27, 2007 6:50 pm

Re: Invest now or wait for the correction [Czech Republic]

Post by tibbitts »

TheEzuri wrote: Sat Oct 17, 2020 4:33 pm It is clear that an economic correction is coming our way, COVID-19 is just the trigger, though some sort of correction was coming our way anyway, I hope we can agree on that.
No, we can't agree on that, except to the extent the markets have already priced that it. You're assuming that everyone here agrees they are smarter than the markets and see something as obvious that the markets as a whole don't. I never would have guessed the degree of recovery from the spring that we've experienced, without really a corresponding change in Covid outlook. Did you forecast that accurately? Did you forecast the drop in the spring accurately? What did you do during that correction?

A correction will surely come eventually, but when it does, it could be for a completely unrelated reason. Wouldn't it be unusual historically to be looking for a (second, I'm assuming is what you're saying) correction only a short time after one had already occurred?
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