That’s Just Reality

That’s Just Reality

“I can’t recall ever once seeing the name of a market timer on Forbes annual list of the richest people in the world. If it were truly possible to predict corrections, you’d think somebody would have made billions by doing it.” –Peter Lynch


Hopefully, as a regular ready of my e-mails, you believe, as I do, that there’s no proven way to time the stock market. I wish there were! I wish there was some way of knowing when to move to the sidelines to avoid losses and when to get back in to capture the upside.

As mature investors, we have to accept the fact that this just can’t be done with any consistency. That, unfortunately, is just reality.

So, what’s an investor to do? First and foremost, you must have a portfolio that aligns with your personal risk profile. You must know going into the investing game that there are times your investments are going to lose money.

The key is having a portfolio you can live with through good times and bad. It’s not easy but it’s the only way to capture the generous long term returns the global markets have to offer.

Check out this graph from DFA that shows what happens when you fail at market timing. What Happens When You Fail at Market Timing