Lump Sum Investing

Discussions about brokerage firms for futures, stocks and other tradeable instruments.
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TC
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Lump Sum Investing

Post by TC » Mon Aug 09, 2004 12:35 am

Old European

Unable to post a reply in the forum where you originally posted.

Your assertion that there may be an advantage to investing in funds experiencing a drawdown has some merit. I have been told that some professional fund managers specifically seek out established, profitable funds when they are in a drawdown. Plenty to choose from now !!!

I have recently completed a study of the S&P 500 for the past 20 years to find the best month in which to invest an annual lump sum. For the S&P500 the highest total 20-year returns would have come from an annual one-time investment made every year during the third week of September. Early October came a close second.

As an interesting aside I found during this study that the ratio of 21-day periods that were Up to 21-day periods that were down was 1.61, the Golden Ratio.

Just a coincidence I'm sure but no doubt the Fib fans will appreciate it !

richard
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Post by richard » Mon Aug 09, 2004 10:13 am

Of course, just because something has worked in the (recent) past doesn't mean it will work now.

It could be that you are investing a lump sum in a fund that has a drawdown, and that the fund will have more of a drawdown after you invest.

Put it this way: of all the funds that did so poorly that they busted or at least shut down, how many had experienced major drawdowns prior to the events that finally led to their bust or closure?

Old European
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Post by Old European » Fri Aug 13, 2004 5:16 am

TC and Richard,

Thanks for your comments!

Old European

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