Pullbacks happen, and usually the market recovers, so trying to time them is probably a fool’s errand – and a money loser.
The above comments, and those below, have been edited for the sake of clarity and brevity to provide a fast and easy read and have been excerpted from an article* from BusinessInsider.com originally entitled Trying to time the market can be dangerous and can be read in its unabridged format HERE.
According to Bank of America Merrill Lynch’s Savita Subramanian, trying to play the timing game is walking a razor’s edge.
“The historical median 1-month, 3-month, and 6-month returns following 5%+ pullbacks (which historically have occurred 3.4 times per year on average) are positive, with the market up ~60% of the time following such pullbacks over each of those time periods,” said Subramanian, [and, as such,]
“trying to time pullbacks can lead to underinvestment and underperformance.”
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