Listen up; the markets are dangerous right now, so you need to be extra smart. Concerns that Greece’s debt problems could spill over into other countries has sent world markets reeling the past week. And I think we could be in for more volatility. That’s why I want you to be extra careful in how you invest at this point in time.

Recognize the Risks.
The markets have had a tremendous run since their March 2009 lows; the S&P 500 stock index is up more than 60 percent. That’s a lot of ground to make up in a short time, especially given an economy that while recovering is not fully recovered. A pullback from here shouldn’t be surprising given the fast and steep rise. Meanwhile there’s the evolving concern that Greece’s debt problems  could spread to other countries given the inter-connectedness of all our economies. Add it all up and there’s more to worry about than cheer.

Take it Slow.
If you are a long-term investor with time on your side-at least 10 years, preferably longer-I want you to keep up with your investing. But  right now is when you must dollar cost average. It makes no sense to invest a big lump sum given the volatility in the markets today. Stick to periodic payments every month or quarter and you will be able to buy more shares with those dollars each time if in fact the market continues to go down. Yes, the market going down when you have time on your side and you are dollar cost averaging is a good thing. Of course, your ultimate goal is that you want the market to go up so your shares rise in value. But that’s the long-term goal. Right now, if time is on your side, you should want the markets to go down so you can accumulate the most shares for the dollars you invest. And the way you do this is through dollar cost averaging where you invest essentially the same amount of money every quarter or month.

For those of you doing IRA ROLLOVERS or ROTH CONVERSIONS.
For those of you who are about to do an IRA ROLLOVER or a ROTH Conversion and you are all in cash, I would not take that entire amount of cash and invest it all at once.  I would absolutely divide that money up by dividing it by 12 and invest that amount month in and month out using the Dollar Coast Averaging technique I talked about above.  So if you are rolling over $12,000 I would divide $12,000 by 12 which is $1000 and invest $1000 every month or if that is too much for you divide $12,000 by 4 which is $3000 and invest every four months.  Just make sure that what you are investing in is good quality and that you watch it carefully.