One thing that scares me is the aspect of putting a good amount of capital in the market at the top. I am typically a long investor.

I know about cost averaging, and spreading it out. But say for example one ends up buying in at the top of the market, at a brokerage, or IRA type account.

How do you protect yourself from losing everything, and even gain/keep even in a downward market? Looking for options other than buy more and wait.

Do you do things different between account types?

Go read The Big Investment Lie and then decide if you want to try timing the markets.
 
https://www.amazon.com/Big-Investment-Lie-Financial-Advisor/dp/1576754073/

ETA: I have considered using leverage and only increasing my leverage after a 20% down from market peak.  Combine that with a relatively low leverage ratio (30-40% leveraged) and I believe it would minimize your risk of total loss while letting you pick up a few extra points over long term holds.  Your still increasing risk, but IMO less than a traditional buy and hold position.  Historically, a 50% drop from peak is a fairly unlikely event.  By only using leverage at 20% off of peak, you can go below 50% off peak that would trigger a margin call on a traditional 1:1 leveraged account.

You don't lose anything unless you sell when the market goes down.  100 shares of some fund at $100/share is still 100 shares even if they drop to $20/share.  Time is your friend and you simply wait (and keep buying!) if the market starts going down.

I think this is a good short read, not exactly about timing the market though.
http://www.marketwatch.com/story/understanding-performance-the-sp-500-in-2015-02-18

There is not much you can do. Market timing does not work. If someone could reliably predict the market they would be the richest person on earth.

What you think is a high point today might not have been a high point after all two months from now.

The only thing I can recommend and is what I do is buy the same amount every month. My wife and I contribute a set amount every month to our retirement accounts. We do this without fail and don't even look at the market prices. Over time it averages out. I would be hesitant to drop a huge sum at once. Even with an IRA where you can contribute 5k or whatever a year you don't have to do it all at once. You can do say $400 and change a month.

The only thing you can really do to protect money you already have invested is buy options. They can almost be looked as as insurance. I would not really recommend this as it will waste a lot of money but they can be used to protect an investment at a cost.

Really if you are looking at retirement what do you really care about what the market is doing day to day or month to month. I only sit down and really analyze my investments once a year. I don't plan on touching the money for at least 20 years. I don't care what it does over the short term as long as long term it is going up. I have this peace and confidence because I am well diversified and do not hold single stocks. I invest in things like the vanguard total stock market and vanguard total International funds. If they don't grow over the long haul we have major problems.

i read an interesting article about timing the market and wished I saved it. Basically if you put $100 spread over the DOW since it's inception, you would have a huge pile of money. If you missed just 5 of the best days it had, you would have less than half as much. If you missed the top 10 days, it would be even smaller. That includes even the big drops/recessions/depression.

when the market is low, buy. when it's up, buy.

In the long run, it doesn't matter when/where you buy.

Time in the market versus timing the market.

If you come into a huge pile, then just put it into something liquid and low risk (like a money market) and do an slow and orderly transition into your eventual preferred investing model.  (Essentially, buy 2-10% of what you want to own a month).  Like everyone is saying don't time the market.  Think of it as a reverse of what the retirees are doing; you end up trading dollars (unmade dividends/gain) for lower risk.  I would never bothering doing it with less then a couple of million.

Vanguard, among others have studies that show that dollar cost averaging earns less than investing a lump sum right away due to a) time not in the market and b) dividends lost for the uninvested funds.

If you have some $ you aren't going to touch for a few+ years, sink it.

It takes guts when the market is (literally) at a new all time high, but look back a year, 2 years, 3, 10 when people were saying the same thing and have been waiting for a "magical" 10% correction that never came.

Like one of CNBC's financial pundits said, either the market is at an all time high or it isn't.

If youre investing long term just buy and forget about. Its impossible to time the market, not even expert traders can do it, no one has a crystal ball that can see into the future, if they did they would be trillionaires.

You need to know your time horizon and risk tolerance, and then allocate accordingly and just invest.  If you plan to ease your money into the market, you will be overweighted in cash the whole time you're dripping money in.  If you're going to invest in the stock market, you should have at least a 5 year time horizon, such that if it drops sharply the day after you invest, it's no big issue because you don't need that money any time soon.

First, you tell me where the top of the market is, then I can tell you how to avoid buying there.  I am serious.  That is the only way to know FOR SURE.

I have a good portion of my money in the S&P 500 index. I wish I had put at least 75% of it in there previously... Eventually I'd like to get that amount of my money in there and I'll play with the other 25%.  


Sure you won't really 'get rich' if you play it safe in a mutual or index fund. But you are likely to do very very well over the course of your life-time with those returns.  Statistically your better off continuously investing whether the market is low or high then trying to time the market. And in general I think an index is the way to go. If I can maintain an 8-10% average return I'm plenty satisfied.


The morning after? Must be a diehard liberal that thought the sky would fall when Trump took office.


I actually put a good portion of my savings account into the market the day after the election.

Unless you hit the lottery, you are like most people and don't make all your money at once so you shouldn't have the problem of having to invest it all at once.

If you do happen to be sitting on a ton of uninvested money, look at the brightside.  The WORST 30 year rolling average of annual returns in modern market history was about 8%.  That's not a bad deal for any dollars invested today under the (reasonably) worst case scenario and surely you'll have more dollars to invest later if there are bargains to be had to further balance out your results.

If you only have access to different mutual funds you can rotate to different funds or go into a bond fund or all cash depending what the rules are and fees. You can always go to cash. Tell me why you think the markets at a top?

What we can learn from this thread is, to look at where the market was when OP started this thread, and where it closes tomorrow.

My thought is that he’s kicking himself in the butt right now.

Watch the bond market it usually predicts the macro environment