With stocks making new highs, we usually we get the question the other way around. When will the market sell off? Will interest rates go up soon? Should I sell some or all of my equities?
As financial advisors, these are challenging questions to answer. You are often better off to just flip a coin to get the answer because the market usually defies most predictions. A seemingly high equity market can go even higher, while an oversold one can go even lower. So what should the long term investor do? The bottom line is that the long term investor should be a long term investor and ignore the short term market gyrations. I started in the investment business in 1990 when the Dow Jones was below 3,000. The big question was whether it would ever get back to 3,000-no one was even thinking about 5,000, 10,000 or even 17,000-but here we are.
Very few of us are thinking about 20,000, 25,000 or even 65,000 on the Dow but it could easily get there in our lifetime. So, sit tight, stay the course, ignore CNBC, the Wall Street Journal, Marketwatch and Yahoo Finance. Buy quality equities, dollar cost average and use low cost investments. You should be well rewarded for your patience.
Please click the link below for more of my thoughts on
”Timing the market vs. time in the market.”