Don't get me wrong. I read financial news and follow market trends. However, I do not stockpile cash and wait for the next article to tell me that it is time to invest. I find it interesting when there are articles suggesting that a dip in the market should result in some quick spending by investors. Is that supposed to apply to me? Or are only large firms with serious assets allowed to play? Regardless, attempting to time the market is usually a bad idea.
Sticking to a timetable
For me, investing is about timetables. If I need the money in a year or two, I don't typically invest in the stock market. When there is a drop in the market, I do not panic and pull my long-term investments. Certainly there is risk in any financial strategy, but I have to believe that the market will eventually pay off. As I get older, I will convert my investments into more conservative vehicles. This is boring, but ultimately I find it to be a prudent strategy for meeting my financial goals. You can be ambitious when it comes to investing, but you can't get greedy.
Too late to react
The other problem with reacting to financial news is that by the time I get assets together, it may be too late. It is sort of like reading financial magazines. By the time a magazine is printed, the story may be weeks old. Therefore, the "hot" stock tip may have already been heard by just about everyone. In my earlier years, I picked some stocks based on the recommendations of "experts." Some turned out fine, while others ended up failing miserably. Welcome to the challenges of picking investments.
Small scale moves
Certainly I have some assets, but I cannot afford to jump in and grab stocks or funds just because there is a temporary dip in the market. Who is to say that a drop won't keep going down? Investors are a shifty bunch, and the concept of "consumer confidence" can be very hard to gauge. Over the years I have discovered that there is really no way to predict how the market will go based on how people are "feeling."
As noted in the article, investors are " just waiting for a better entry point." In other words, people are still trying to time the market. Good luck with that. I won't get caught up in trying to pick a number on a spinning wheel. Assets are too precious. Investing is about sticking to a plan and minimizing emotional decisions.
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More from this contributor:Qualities of a Good Manager
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