Most legitimate market participants will tell you not to try and ‘time’ the market. What they mean by that is don’t try and predict when the market is going to fall and when the market is going to climb higher. Historically, this has been extremely difficult to predict with any real accuracy, but ETFs could make it easier for you to accomplish.
So, most advisors tell clients to stay invested in the markets and ride the ups and downs. I fully agree with this thinking because it is very difficult to predict major market moves. For example, while some people did predict the market would crash in March, not so many thought it would tear right back higher as quickly as it did. Even those who did predict the move higher had a hard time predicting wh the bottom of the fall was and when the actual bottom was and, therefore, the absolute ‘best’ time to get back in.
The biggest problem with trying to time the market is that you will miss part of the moves back higher. And knowing when the right time to get back in is more difficult than just riding it out the wave up and down.
Think about it this way. If you sell ABC stock at $100 because you think the market is about to crash. And let’s say that you were right about the market falling. When do you repurchase ABC? Continue reading "Using ETFs To "Time" The Market"