dollar cost averaging / fiduciary / investing / loss aversion / risk tolerance

So you think you’re going to time the market and jump in when things look good

Forget about it! The stock market lurches up and down in dramatic gains and losses with no warning!
No bell rings at the bottom of the market signaling it’s time to buy!
Some recent examples, among the gut wrenching downward drops:
March 27, 2020 the Dow Jones Industrial Average jumped 12.8%! in one day!
April 9, 2020: the DJIA leaped 12.7%.
This was the index’s best rally since 1974 (before many investors were born).
there were only 7 days in all of the stock market history that the market rose at a faster rate.
The stock market (whether measured by the DJIA or the broader S&P 500 largest companies) can swing wildly in one day. It does not increase or decrease gradually. Due to computerized trading, it’s NOT individual investors or individual professionals deciding to buy or sell on any given day. So much of trading is based on algorithms that automatically buy and sell based on computer models.

So… what does this mean for individual investors:
Don’t have money in the stock market that you will need in the next 5 years.
Have a serious talk with yourself about your risk tolerance, time horizon, investment goals, and, especially for retirement investors, your capacity for risk.
Risk capacity is different from risk tolerance. How secure is your job? does your spouse/partner have a secure income? are you single? Do you have a mortgage? How much debt do you owe?
Besides, plenty of evidence has demonstrated that investor risk tolerance is NOT stable but increases with rising (bull) markets and plummets with falling (bear) markets. Those risk tolerance quizzes that investment pros require you to fill out… not worth the paper they are printed on.
What did you do with your investments during the financial crisis of 2008-09? 
Don’t make short sighted decisions based on the hype of today’s stock market report.

Remember that investment losses inflict twice as much pain as similar dollar amounts of gain provide pleasure. Losses hurt twice as much as gains feel good, even when the potential loss is relatively small and doesn’t pose much risk.  This is the concept of Loss Aversion. Loss aversion explains why too many investors sell at the bottom of the market and wait to resume investing until prices have risen, often above what they sold their investments for in order to avoid a loss. They locked in a loss by not understanding their own risk tolerance and investment psychology.
A market decline is an opportunity to buy stocks when they are on sale. Why is it that individual investors love to buy when stocks are overpriced? Buy a case load when the product is on sale. 

Instead of trying to time the market, invest a set amount each month to add to your portfolio, regardless of the price. Practice dollar cost averaging. 

Work with a trusted financial adviser who is a fiduciary and committed to putting the client’s needs above their own.
Determine a realistic asset allocation for the long run and stay the course. 
P.S. Good luck with that!
Source: Financial Planning for Women