Hey guys. This is my first post on reddit, I thought to come here because this is not exactly the type of question I can google. Im 22 yrs old, new to investing and was wondering if I could get some comments/advice on my idea.
I have come up with a financial plan for my life and want to know if it is at all feasible because I've never heard of someone doing something like this.
About me: 22 years old, graduated 2 months ago with a degree in civil engineering with 0 student loan debt, just got a 60k job a few weeks ago. I still live at home so my living expenses are very minimal. This is an ultra long term investing strategy. I could call it my retirement plan. I never plan on selling/cashing out, just accumulating slowly till I have about 2 million dollars so I can retire early and live off of dividends. Not really relevant info but I also own a couple Bitcoins and 18 ETH which I plan on holding for a decade at least.
Basically I was thinking of doing a modified dollar cost averaging and trying to time the market at the same time.
My idea is basically trying to invest more money when the market is down and less when the market is up. Similarly, I was thinking of investing in blue chip stocks when the market is down and index funds when the market is up. I feel that this gives me the best odds of success because buying stocks on a dip means that when they rebound I will get much bigger gains. However I dont want to time the market and miss out on gains on the way up, so buying into an index fund which is less volatile seems like a good idea when the market is bullish. This way If it dips the hit is not as drastic to my portfolio, and this way I dont buy into stocks that have the potential to collapse quickly at the top, just ETFs that take time to dip.
These are approximate numbers and totally pulled from my ass just here for the example, Im mainly here for comments asking if this is feasible at all, if anyone else does this. Example: I would put 3k into my brokerage account every month. Right now since we're in a very bullish market I would invest 2.5k every month into funds like VOOG, VYM,VB, etc. This leaves me with a 500 dollar per month cash reserve.
When we enter a recession, I would still put in 3k per month but I would also use my cash reserve to invest 3.5k dollars per month in high dividend paying blue chip stocks such as LMT, CAT, STAG, MMM, JNJ, and COKE.
I feel that since Im dollar cost averaging these stocks while theyre in the process of dipping, I will have much much bigger gains on the way up. Similarly, I'm dollar cost averaging ETFs and funds on the way up and since they move slowly, the hit wont be so drastic when we enter a bearish market.
Thoughts on this strategy? Also, where/how should I divide the money? I have a Roth IRA, a normal investing account, and a Robinhood investing account. I was thinking put ETFs into the IRA and put stocks into the regular investing account.
Any help would be appreciated. Thanks.
Submitted July 12, 2017 at 09:42PM by Blurple1 http://ift.tt/2vezZRx
