Time IN the market, not TIMING the market

Monday, October 6th, 2008 by Cass Chappell, CFP®


               Yes             No

                                              Yes                                         No     


With the recent volatility in the markets, investment companies have re-doubled their efforts in providing advisors like us with materials meant to “calm the nerves” of our clients or provide some perspective.  I have quoted this slide, from American Funds, on many occasions (or numbers similar to it).  It is my favorite “market nugget”.

Although the markets have given up much of their gains from Thursday and Friday of last week, those days represented large upward movements.  In most cases, days like Thursday and Friday are unforeseen and unpredictable.

 Successful investing can sometimes be described as “time IN the market, not timing the market”.

Your gut may be telling you that “this thing” isn’t over, the economy is in trouble.  The next President (insert name here) is going to mess the economy up further.  Gas stations are out of gas.  Inflation is right around the corner.  Taxes are going to go up and further slow the economy.  Home prices are going to go lower and more mortgage defaults are going to happen.  The great depression is ready for a repeat.
After thinking about the ideas above, thrown at us every time we log on to the internet or turn on the TV, who WOULDN’T be scared to invest?  Who WOULDN’T want to move their money to something safe or more conservative and “wait for the storm to pass”?

Problem is……no one can predict when these big upward movements will happen.

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