June 27, 2019
By Peter Bower
Nervous yet?
It wouldn’t be unusual; after all, popular stock market averages are up 15-20% through the first half of 2019. Concern is common, investors seem to be more jittery sitting on big profits than on losses. It may be that with losses they know they are not going to sell but wait for better. With gains, however, they are just itching to make a move fearing a setback.
It would be nice to see the future; nice to avoid setbacks and buy bargains when available. Unfortunately, that is fanciful. Unless one is simply selling stocks to do something else entirely, repurchasing is necessary. That requires market timing which is tantamount to divining the future which we know is impossible.
Trying to time the market has cost more investors good returns than just about any other mistake. It is the major reason that the long-term results for most investors badly lag the available returns from owning a diversified portfolio of stocks. Of course, there are times when risk needs to be reduced. They are far rarer than most would believe. Most times, one simply needs to stay steady and be patient. Time is more on an investor’s side than not.
Today, markets and economies around the world are awash in cash. Major central banks are flooding their economies with liquidity. This liquidity is powering gains in many different asset classes everywhere. So right now, its simply time to ride the wave.
The Lonely Bull
