Is it Time to Market Time?

14 10 2009

Mike Carignan Internet

by Mike Carignan, CRPC

I was watching one of the many financial media/disinformation sources this morning and they were talking about the fact that the S&P 500 has had 6 days closing up. This is the most successive up days in the last 2 years. The follow-up question is one that we hear a lot…”Is it time to get back into the market?” Well, let’s think about the last year and where we are.

Last October the market “melted down”.   The media had a field day and was constantly bombarding us with the doom and gloom of the day.  It seemed every day there was some new revelation or calamity befalling the market that was going to cause the end of investing as we know it.  What followed was a mass exodus of money from equity and corporate bond investments into government debt and cash.  Many investors finally “had enough” in late February when the S&P 500 broke through 750 and lost another 70+ points…and they’ve been sitting on the sidelines since.

What have they missed?  Since the March low the S&P 500 has rocketed a whopping 400 points from 676 to 1076 as of 10/12/09. That’s a 59.2% increase.

This is a great illustration of why market timing is so dangerous. It gives us a rational for giving in to our worst fears, selling when everyone else is panicked and then waiting for the other shoe to drop while the market rebounds strongly.

The moral of the story…decide if you want to invest for the long term result or for the thrill of the gamble.

 

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Investment advisory services provided by PARAGON Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093

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