A Fool’s Game – Market Timing
By: Curt Stowers
The Odds (and Data) Are NOT With You
We’re in the final month of 2020. It has been perhaps the wildest year—in terms of investing—that has ever transpired. We started the year off on a nice steady climb. Covid arrived in March, and we saw the markets tank in one of the fastest declines in history. People were scared and convinced that the stock market was dead.
And then in April, the market rebounded in a shorter time than I can remember. By August, it was back to where it had risen in February. The last three months have provided a “lovely” roller coaster ride of ups and downs that should have convinced everyone that volatility and variability are key parts of the investment experience.
Throughout this past year I have repeatedly been asked “should I get out?” and “should I get in?” My answer has remained un-yielding:
- You should be following your written Investment Policy Statement and should not asking me this question.
The chart below shows why I believe so strongly in this:
This year was a bit wilder than most. However, it was not unexpected, AND I strongly believe that future years will yield high degrees of volatility. That does not worry me. Investing in the stock market is purchasing ownership of businesses. Businesses are made up of God’s most amazing creation—human beings. And I have complete confidence that over time, all of us humans will continue to do amazing things that result in new discoveries that drive the economic engine of growth.
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