Calling a Stock-Market Top Is Only Half the Battle
This article serves as a great lesson for those who think they can time the stock market. The reality if that to time it properly requires being perfect twice, once when you get out, and again when you get back in. I agree with the professional investors quoted in the article, it is true that some investors are able to time markets, but the vast majority of investors will only lose value for their trouble.
It’s hard to decide when the market has peaked and it’s time to get out. It may be even harder to know when the damage is over and it’s time to get back in. But pulling off both in succession is exceedingly rare.
This would be important to keep in mind at any time, but especially right now as the bull market that began in March 2009 is entering its 54th month.
Since peaking on July 24, the broad stock market—as measured by the Wilshire 5000 index—has fallen 2.7%. Even if the market has topped out and you sidestep a decline by getting out of stocks now, the odds of long-term success still are against you.
Trying to time the market is by and large a losing proposition, even for the pros.
See full Wall Street Journal Article here.