In late March, I was speaking with someone about IRA contributions. Both of us agreed that we were hoping that the market would come down a bit before the April 15th deadline to make a contribution for the 2009 tax year. By April 15th, the market had gone even higher on early signs that a recovery was gaining steam.
Recent data in this past month has cast doubt on hopes for a strong recovery and the market has declined 16% from its high on April 23rd. Now might be a good time to think about making some part of a 2010 IRA contribution. If you think the market could fall further into bear market territory, a 20% or greater correction, then stagger or dollar cost average your contributions. Too often we make the mistake of not thinking about IRA contributions till a few months before the deadline.