There is a reason why the stock market fell by nearly an order of magnitude during the Great Depression. The U.S. has since partially remedied that reason. This partial remedy has saved us from another truly catastrophic crash, but still lets the market bounce around enough to be interesting for those who like that sort of thing. And a bouncy market makes makes Dollar Cost Averaging look real good.
The problem with a bouncy market is that the dynamics of Dollar Cost Averaging work in reverse when it’s time to sell — for example, when it’s time to retire. Note to small government conservatives and libertarians in the audience: if you want to convince the voters to privatize Social Security and invest in the stock market instead, you have to take the bounciness out of the stock market first. I introduce how in:
Read it. Then come back here if you wish to comment.