Dollar-Cost Averaging In A Bear Market

In March 2020, international markets nose-dived due to the COVID-19 pandemic’s economic impacts. At that time, I had been an attending physician for only six months. I made the decision to make a large, one-time investment in low expense-ratio index funds knowing the market would eventually grow and I would compound over time. Fortunately, this bear market was relatively short-lived, and my investment was worthwhile.

With the current bear market in 2022, I’ve increased my dollar-cost averaging investment strategy from monthly to weekly investments. The idea is that instead of guessing when the market will be at a low, I’ll make small, weekly investments into zero expense-ratio index funds. I also dabble in shorts, but the majority of my investments tend to be long-term (at least 1 year to avoid short-term capital gains taxes), and I think this will be a lower-risk strategy.

Fidelity makes this process very easy through scheduled transfers from my checking account with automatic investments on the 1st, 8th, 15th, and 22nd days of each month into Fidelity ZERO® Large Cap Index Fund and Fidelity ZERO® Total Market Index Fund.

Set it and forget it! We’ll see how this turns around with the next bull market!

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