The roller coaster ride continues in the market! Just like the real thing, trying to get off mid-ride could prove problematic. Most people have heard the saying “it’s about time in the market, not timing the market” and historically that has proven accurate. Generally trying to time the market results in missing some of its best days, and even if you miss the worst days at the same time, your return usually suffers. My dad always used to say in jest “I’d rather be lucky than good.” If you want to try to time the market, you might be better off buying Lotto tickets because the “best” investors in the world don’t have the skill to do it.
Although maybe this time is different? This is a major worldwide epidemic and countries and states are shutting down. The world has dealt with health crises; AIDS, SARS, Bird Flu, Ebola, Measles – historically, the markets have come back but the question of when and by how much is always the unknown. Anyone who claims to have the answer is selling you something. That does not mean reflection and perspective are not important.
Investing is about being honest with yourself, about your goals and risk tolerance. How much are you willing to attempt to earn in return and equally as important, how much are you willing to risk attempting to make it. It can take some time to get to the truth behind what you believe, and some trial and error! Of course, it will also change over time. Sometimes taking risk off the table is a good idea if you are ok with giving up the return potential. It is never a one-way street; you either take on risk for the potential of greater returns or you give up the risk for the safety of lower returns. Oh, how I wish I was just lucky!
Photo by lewis pratt on Unsplash