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Investors Pour Into S&P 500 ETFs

By Erik Folgate

Yahoo Finance posted an article from Investor’s Business Daily about investors putting more money into S&P 500 index exchange-traded funds.

This is a good sign, because investors are starting to realize that now is the time to buy domestic stocks. The quasi-recession will be short-lived, and buying domestic stocks at a discount is how you become wealthy. Emerging Markets, European Markets, and the Gold market exchange-traded funds were the hardest hit for investors pulling out their money. These are trendy funds. This means that short-term investors are speculating a fourth-quarter rally for the U.S. economy. I think they’re right.

Investment Tip:

Do not try to time the market. When you time the market, you can potentially lose out on hundreds of thousands of dollars. If you pull out your money when stocks drop, you’ll buy back when they are high again. If you buy even when you are losing money, you can double or triple your returns when you buy at the trough of a stock price. This is why dollar-cost average investing works so well. Investing $400 a month for 30 years will make you a multi-millionaire.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • ekrabs

    I guess I shouldn’t be surprised. The DOW has been trending fairly flat recently, and in the past week, we’ve experienced a monstrous rally lead by the financials.

    To some investors, it look like the sign of a rebound. However– and I should qualify that my crystal ball is murky at best– but I think there is still some room for the market to fall.

    You see, the rally is due to better than expected earning and smaller than expected loss. However, earnings is still weak and financials are still at a loss.

    Does that mean we shouldn’t invest? No. In fact, I completely agree that it’s best not to time the market. However, I also don’t see the recent rally as a sign of a bottom and a rebound.

    For Pete’s sake, it rallied on weakness.

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