CHARLOTTE – A wise man once said “the best way not to be hit by a train is not to be on the tracks.” Do you think this wisdom may fall short as an analogy for the stock market?
Some investors try to time the market in an attempt to avoid the oncoming train of a declining market. The strategy is simple…be in stocks when they are advancing and be out of the market when it is losing value. One of the biggest challenges with this strategy is that you have to be right twice. Not only does your timing need to be right when coming out of the market, but your timing also has to be right as to when you get back into the market.
Coming out of your investments too soon or getting back into the stock market too late, and possibly missing the best days of the market, could potentially be devastating to an investment portfolio, according to a recent study by J.P. Morgan Asset Management.
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This article was written by Dunham & Associates for use by your local Cambridge Investment Research Financial Advisor.
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