If you look to the right side of this chart you’ll see the DOW all time high at 29,511 on February 12, 2020. At the extreme right edge you’ll see it today (3/20) close to its 52 week low at about 20,000. Close to 30% off the market top. You’ve got to figure its going to go lower. In 2008 with the Global Financial Crisis it went negative 48% off the top. I suppose if I cared I’d put 3% of available cash in the market now.
But frankly, I want to see it hit 15,000 before I got serious. Even then I don’t think I’d put more than 50% of available dollars at that point. I think it could get down to DOW 10,000 fairly easily, especially considering they want Trump out so bad. A lot of people think that’s what all this is about. DOW 10,000 would be a 2/3 decline. I think I’d put 80% of available cash in at that point. Never want to go 100%.
Buying opportunities like what may be coming don’t come along that often. For god sakes don’t sell now. Keep your powder dry. What I’m talking of course is an S&P 500 index fund. We’re getting closer, but we ain’t there yet. The bad news is I don’t think it would be in the trough long at 10,000. Psychologically it would be devastating. You’d need to be ready to pull the trigger quick if it gets that low.
[The great buying opportunities I know of with my limited knowledge were 1929, 1973, 1987, 2002 and 2009. Essentially 5 times in the past 100 years was there a distinct opportunity. Number 6 may be anytime. Doubling your money is a good opportunity. Tripling it is a great opportunity.]