Market Timing
Should I try to time the market?
Forget it.
Certainly the most natural urge you can have in today's bear market is to bail out of money-losing assets and put all you've got left safely in the bank, where it can't keep losing. But the fact is that market rebounds tend to occur quickly and unpredictably. If you guess wrong and hold all your savings in cash when stocks ricochet off their low point, you'll have locked in the loss to this point and captured none of the rebound. It's tired advice and hard to stomach in these volatile times. But the best way to go is to select a mixture of stocks, bonds, and cash, and stick with it over time.
Editor's Pick
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Was Everything You Thought You Knew About Investing Wrong?
Stocks outperform long term. Asset allocation minimizes risk. Turns out the old investing bible needs an update.
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Great Minds on a Grim Market
Even market high priests have been humbled by the massacre of the Dow. For wisdom that goes beyond the same old advice, listen to these four.
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Why Buy-and-Hold Investing Beats Market Timing
It's hard to time the market from year to year or day to day. If your portfolio is causing you to lose sleep at night, try offsetting market fluctuations with dividend-paying companies.
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The Dow Is Not a Crystal Ball
Nobody knows whether the market has reached bottom. Rather than making emotional investing decisions, try to build a portfolio that meets your individual needs and stick with it.
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An All-Cash Portfolio Carries Its Own Risks
Stuffing your retirement savings under a mattress (or in an FDIC-insured money fund) will hurt you in the long run, because it's difficult to time when to get back into the market.
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Did 401(k) Investors Try to Time the Market in 2008?
Individual investors pulled out of stocks and stock funds in a major way in 2008, locking in losses. That could keep them from achieving long-term goals, unless they rebalance their portfolios.