Monday, November 10, 2014

Now is a TERRIBLE time to get back in the stock market

Now is a TERRIBLE time to get back in the stock market

No, this is not intended as a joke, and I’m fully aware that it runs completely counter to the conventional “wisdom” of the media these days. Perhaps your own financial advisor is even busy encouraging you to take the plunge you’ve been resisting up until now, but if you’re one of the folks who, for one reason or another, are wondering whether or not now may be the right time to get in the stock market, my unequivocal answer to you is no, no, and no! Please don’t!

Here’s why. Trying to pinpoint a good time to get into and, for that matter, out of the stock market is an impossible task. No one has ever had the ability to predict that, nor will they ever be able to do that. If anyone tells you otherwise – that they know the specific times for you to get in and/or out of the stock market – I’d suggest you don’t walk, but run as fast as you can away from him/her. Whether it’s a website or an app or a TV “expert,” run, because if you don’t, you’ll end up destroying the very thing you’re trying to enhance: your financial future.

If you cannot handle the gyrations of your portfolio that led you to get out of the stock market in the first place, I suggest you simply stay out, because trying to time the market is not possible and you’re more likely to end up derailing your future. According to a recent study released by the independent research firm DALBAR, although the S&P 500 Index has averaged an 11.10 percent annual return over the past 30 years (1983 through 2013), the average person who owned an equity-based mutual fund over the exact same period earned only 3.69 percent!

Of course, many things may account for this dismal outcome. However, the data clearly points to a telling revelation that trying to time the market has failed terribly – as it always has and will continue to do. Over the 30-year period the survey covered, the average individual held any particular fund position for only 3.31 years.

Now here’s what has worked beautifully for our clients. Work with your advisor to design a broadly diversified portfolio with a risk tolerance you can live with and clear benchmarks/expectations to measure your progress along the way, and rebalance when appropriate.  Then let the portfolio actually do what it’s supposed to do. The real hurdle for you as an investor is finding a financial advisor who’s disciplined enough and has the guts to help you stay disciplined so that you can achieve your goals.
Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit or call 877.656.9111 right now to book your complimentary session

1 comment:

  1. I agree with you . Really good post with good contents . Epic Research also given information in stock market recommendation .


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