Standing at the precipice, the cash-laden investor turns to the aged guru and asks quietly, "Is now the time to get back into stocks?" After a thoughtful pause, the guru utters one word: "Depends." The investor stands motionless, awaiting the sage. Finally, the investor asks the obvious question, "Depends on what?" "How you get back in," the guru whispers.
Consider the guru's advice. For investors who exited their equity-based portfolios at some point and are now thinking of moving from the sidelines, there are basically two approaches: jump in all at once (lump sum) or ease in by degree (systematic investments each month or year). The past three years-2008, 2009 and 2010-present an interesting time frame in which to study these two reentry options.
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