Have you been adding to your equity strategy?

A few months ago, on January 21st, we published a post entitled "A few lessons from 2002."

In it, we noted that during significant corrections in the past, including the bear market of 2000 to 2002 as well as 1981 to 1982, diving three or even more times while testing for a bottom is very common, making it hard to call the actual bottom until afterwards.

We also noted that being aware of this pattern can present an opportunity, if your cash-flow situation permits you to deploy fresh capital into equities during significant corrections.

Here is the chart from that previous blog post:

Notice any similarities to the chart in today's post, which shows the Dow from April 20, 2007 through today?

In our earlier blog post, we wrote: "Remembering the three arrows in the chart above, you should be willing to add and then add again later during corrections (if your cash-flow situation makes that possible)."

The question for today is, "Have you been doing that?"

If not, why not?

Many investors, even wealthy investors, fail to take advantage of the opportunity to add to their equity strategy during periods of lower prices. While we don't believe that anyone, ourselves included, can predict market bottoms with any degree of consistency, history has shown that adding to your equity portfolio regularly, and stepping up those additions during market downturns, has been a successful long-term strategy.


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