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Same Stock Market Advice Still Applies: Don't Try to Time the Market
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We always urge investors not to try to time the market. Instead, we recommend that investors put as much money into stocks as will still allow them to sleep at night, and to keep that allocation pretty constant. We strongly believe that virtually no one can successfully time the market. There is an old saying in the investment business: “You can always tell the market-timers--they’re the ones with the holes in their shoes.”
Often we are giving this stock advice at times when the market seems scary, either because of a big drop or high volatility. But it is equally important at times like the present when the market mood is euphoric. There are two opposite temptations at times like this. Some people will fret because they now feel that they have been under-invested in stocks and have missed much of the rally. They suddenly decide to throw caution to the wind and pile fully into stocks before the market goes up further. Other people look at the recent rise in stock prices, become convinced that a big bear market is right around the corner and decide to bail out of stocks. Both temptations are dangerous to your financial health and should be strongly resisted.
Successful market timing requires two different sets of very challenging decisions...
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