Why It Never Works To Time The Stock Market

Why It’s A Bad Idea To Try And Time The Stock Market

timing the marketCrowd mentality is generally wrong.  Have you ever heard to expression, “if everyone else jumps off a cliff are you going to join them?”  Well in the world of investing this is exactly what happens towards the tail end of a bull run in the stock market.  During the majority of the Bull Run, nerves from the preceding bear market are enough to keep the crowds on the sidelines.  Only hard core investors go all in.  It’s actually a terrible sign for the markets when mainstream investors start taking notice.  Generally speaking, that’s the time you want to head for the hills and pull out.

Don’t Allow Emotions To Characterize Your Stock Market Decisions

While most investors know the verbiage, “buy low, sell high” the average investor goes on an emotional vacation getting in just when the market is peaking, and waiting to pull out when the market is starting to tank.  The overall result is not very positive for their profit margins.  If you’ve experienced this first hand, you’re not alone. You’re simply a member of the cliff jumping crowd.

What’s Happening In Today’s Current Market

Should it be cause for concern that more and more investors are taking interest in the stock market?  Generally speaking I would say yes.  The Public has put $92 billion into the stock market since the beginning of the year.  The last time the public went all in like this was the beginning of 2007 when the invested $85 billion.  Before you make the decision to jump ship, it may not be quite time to pull out of the markets in fear of a massive pull-back.  Between 2009-2012 there was such a massive outflow of investors out of the stock market, there has been a large amount of money sitting on the sidelines.  $92 billion may seem like a lot of investor interest, but compared to the waiting money out there, the market may still have some growth potential. There may be some market corrections along the way, but it also may not be time to withdraw your assets quite yet…

For more information on the state of the market and on where to invest to maximize your profit potential, speak to a Redhawk Wealth Advisor near you today.

 

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