By Craig Erwin, Ph.D.
Photo by Shvets Production on Pexels.com
On 4-24-23 Bloomberg used the following headline “Fearful millennials missed stock market rally with shift to cash”. Bloomberg said millennials were more likely than other generations to shift out of stocks into cash during last year’s stock sell-off. They were also more likely to stay in cash when the stock market rebounded. That can be very costly. Bloomberg says trying to time the market, jumping in and out when you think the time is right, does not work.
Many find the stock market attractive only when it’s climbing, avoiding it if the market declines or seems stuck in the mud. Many get out of the market in times like those and get back in only when they think the coast is clear. The problem is, while you sit on the sidelines, you are not accumulating stock and, in the long run, the amount of wealth you, as a stock investor, accumulate depends on how much stock you accumulate. Plus, it you stay on the sidelines during a bear market, you miss out on the chance to buy stock at bargain prices.
Forbes says, when we try to time the market, we are wrong far more often than we are right. And sitting on the sidelines is a great way to lose money. According to Forbes, even if the stock market appears to be especially high or low, we are likely to have poor timing when we jump in or out. The best we can do by far is to get in and stay in.
So, it’s best to keep buying stocks no matter what. Don’t think, don’t analyze, don’t speculate, and don’t worry; just keep buying. If you do, you won’t miss out and you’ll do very nicely in the long run. It’s a great way to pile up wealth.
Are you fully invested in the stock market? Have you tried market timing? If so, did it work?
For more information on market timing, investing, and the stock market, click on the following links: