sivleyd

My Index Based Investments

Your rule to "never invest at historical highs" sounds like genius today. Most of us would like to take back our investments we held at the highs of 2007. However, I suspect you have not actually used this rule, because it doesn't really work. If you look at a long term chart of SPY, for example, you will see that almost all of the gains have generally come from highs that just keep coming. You also say that 50% down is a good time to get in. Yep! But how many times in history has that happened? There's only been one since 1871 - the Great Depression. And yes, if you were alive back then and had money to invest in 1932, you would have seen a full recovery of that 84% drop (if you got in at the very bottom moment). But then you would have sold at the next historical high. And you would have been sitting out the market since then. Yes, this is a great time to invest after a 50% drop. And ETFs are fine. Better rethink your investment rule. It hasn't worked in over 70 years!