The market action so far in 2018 is bringing to light an overlooked investing strategy: Add money to the markets regularly.
The stock market is back at record highs -- above its most recent high reached back in January of 2018.
In January, stocks moved in a parabolic line, rising 8%. We normally see that kind of gain over an entire year, let alone just one month.
And not surprisingly, the January euphoria didn't end too well in February, when the the stock market finally corrected, or fell 10%, something that hadn't happened in years.
Fast forward over 6 months later and the S&P 500 is up almost 13% from its February low. What a buying opportunity that was!
But it's almost impossible to time the market.
A better strategy is this: just put money into the market regularly. You can buy the dips, but try not to get so fixated on the day to day movements of the market.
If you want to see this strategy in action - here are some numbers: if you were hooked on the January euphoria - and bought U.S. stocks at that time, you'd be up about 3.5% right now. If you had simply bought at the end of every month -- regardless of whether the market was overbought or oversold -- you'd be up 6%, according to DataTrek Research.