But emotions is not the only way to time the market. Looking at economy, expected growth, problems is another way. Yet another way is to buy when the pessimism is at its worst and sell where there is “irrational exuberance”. Instead of selling in February I bought. Not as much as I should have – it’s difficult to resist panic. I resisted selling, but I didn’t have enough courage to buy more. My friends bought several stocks as well. Yes it is a risk. But anything to do with the market is risky. Buying and holding forever is risky as well as we all found out.

I do agree that right now is a bit difficult. I don’t know where the market will go at this point: there are some encouraging signs, but there are also big problems with the economy. I sure will look at both carefully.

Stock market is risky. It is risky when you try to time it, but it is not risk-free when you hold either. So I think everyone who invests in the market, whichever way they do it, should pay attention to the economy.

I’m more or less talking about the average person who just quietly plugs away at investing in their 401k and doesn’t follow the market or their investments at all. For these types of people, jumping in and out of the market based on what limited knowledge they have is a fool’s errand.

I see far too many of these types of people take their whole retirement nest egg and just move from stocks to cash and vice-versa based on the latest headlines or their gut feeling as to what the market might be doing without having any sort of plan or sound reasoning.

That’s not to say the right thing is to just buy and hold and forget about it, but people really need to take the time to understand what they are doing and why, or seek professional advice before becoming an arm chair trader with their life savings.