The general advice is to buy an index fund because over a long period of time the market will rise.
But what if I buy before a bear period? I will be stuck there 10 years just to recover my money and another 10 years to make some returns.
But what if I buy before a bear period? I will be stuck there 10 years just to recover my money and another 10 years to make some returns.
You can guard against left tail risk with insurance. See the VXTH index and the SWAN ETF for good strategies here. Don't buy too much insurance, or you can't make money.
You can also think of your future salary as a kind of bond in your portfolio that you can't sell. Seen in that light, the optimal balance is probably using some leverage, even if that means risking a total wipeout early on in your career.
The story of “Bob”, the world’s worst market timer, only buying at the peaks:
* https://awealthofcommonsense.com/2014/02/worlds-worst-market...
Don't try to figure out when the dip will occur, just sitting with cash on the sidelines in the meantime. Buying a little every month is generally the best strategy most of us should use:
* https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
> I will be stuck there 10 years just to recover my money and another 10 years to make some returns.
For the US at least, things generally don't take too long to recover (Great Depression notwithstanding):
* https://awealthofcommonsense.com/2020/03/how-long-does-it-ta...
* https://awealthofcommonsense.com/2021/07/how-long-does-it-ta...
If you're saving for retirement, then you actually want it to go down (occasionally): that means your monthly contribution can buy more for that month. Then once you're near retirement you move your portfolio to something more a conservative leaning so the swings don't effect you as much.
If you’re talking IRA, we’ll you could have only put in $6k. Market dumps and the following year you can put in another $6k at a much lower price per share.