Wednesday, September 23, 2009

A Successful Recovery from the Market Decline

In How to Survive a Market Decline, FMF at Free Money Finance writes how he is within 5% of his all time net worth high. His strategy was to continue investing in index funds throughout 2008 and 2009, and even increasing his monthly contribution in some cases.

Given that that the Dow and S&P 500 are still down 30% from their all time highs, FMF has had a pretty good rebound in his net worth. His post shows how continuing to save and then dollar cost averaging while the market is falling can be very beneficial when the market starts advancing again.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

1 comment:

Anonymous said...

that has to do with how much was invested relative to monthly saving rate. If someone has a 2 million dollar portfolio and dollar cost averaging a few thousand dollar addition each month is not going to help much.