Comments on: March 2009 Was a Perfect Example of Why You Shouldn’t Try to Time the Market

By: MoneyEnergy

MoneyEnergy — Tue, 14 Apr 2009 20:33:05 +0000

Nicely written, very convincing argument! I’m glad I stayed the course – haven’t sold any of my stocks ever, except one that fell down to a penny stock a few years back. I think I’d add that if investors start getting scared, one option might be to simply redirect your investment expenses towards less volatile, safer vehicles rather than cashing out what you do have.

By: Goran Web

Goran Web — Tue, 14 Apr 2009 08:01:03 +0000

Personally I don’t think the stock market, or any paper assets for that matter, is the way to go at present. Hoards tangible commodities, like gold, if possible.

By: kitty

kitty — Sun, 12 Apr 2009 15:57:30 +0000

You have a point. If you try to time the market you may lose. If you act on emotions – you will lose.

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.

By: Jeremy

Jeremy — Thu, 09 Apr 2009 20:35:24 +0000

Dana, thanks for that link. Some good observations there. Personally, I have nothing against taking advantage of opportunities in the market and making trades when necessary. I do it all the time.

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.

By: Dana

Dana — Thu, 09 Apr 2009 19:39:49 +0000

This is interesting, there are real timing issues with staying the course when you dig into it. I saw this today, and thought I’d share it. Scroll down to see some comments from the WSJ, some of them are worth thinking about.

http://www.fundmymutualfund.com/2009/04/more-investors-say-bye-bye-to-buy-and.html

By: pays to live green

pays to live green — Thu, 09 Apr 2009 18:48:12 +0000

You are very correct, nobody really knows where the stock market and our economy as a whole is going. Let’s just hope that our market can rebound and within the next few years, we can fully recover.

By: Ken

Ken — Thu, 09 Apr 2009 18:05:42 +0000

Well written post! This is evidence that basing judgments on emotions will not win! Think long term.
I liked your graphs.

By: Jorge

Jorge — Wed, 08 Apr 2009 22:37:07 +0000

Jeremy – I liked your article. It just goes to show, that the best strategy is to develop a long term investment and allocation plan and stick to your guns. Re-balance once or twice a year and don’t watch CNBC!

Thanks.

By: Baker @ ManVsDebt

Baker @ ManVsDebt — Wed, 08 Apr 2009 22:09:04 +0000

Jeremy,

Fantastic article. Glad to see you were able to get some writing in between small naps. Although I am actually not in the market, I’m glad to see it bounce back a little bit. To me it seems like a reward for those who stayed the course. Obviously, we have no idea where it’s going from here, which is exactly your point in not trying to time the market.

Well written!