Crystal Balls, Market Timing, and Predicting the Future

As the markets continue their cycle, we are hearing two questions over and over again from you. They are "is it time to get back into the market" or "are we near another crash". While they may seem like similar questions, they are actually very different with different answers.

The first question relates to an investment strategy those in the business refer to as market timing. The belief is that you should be in the market during good times and get out of the market before the market begins a down cycle. What's more is the average investor expects their financial broker to make these moves for them. Many brokers believe you never need to make moves because your investments are long-term!

Market timing sounds great and looks good in theory. Who wouldn't want to enjoy the market going up and get out before it goes down? In reality, it just doesn't happen. If these programs and systems worked, we would see trillionaires instead of the billionaires we have in our society. When these programs and systems don't work, it's YOUR money that is lost, not theirs.

The second question, 'are we near another crash', ties into that, but the underlying question goes deeper. People want to know if we are near a crash or what do we think the market is going to do going forward. The talking heads of TV debate whether we are in a bull market (going up) or a bear market (going down). You will hear them going back and forth about previous market events and use that to prove what will happen going forward.

The true answer to the question is NO ONE has a crystal ball, so how can they predict the future. Don't worry about a crash or a raging bull market. You need to be sure that your portfolio properly reflects how much risk you can tolerate.

To hear the Smart Money Radio Show segment focused on this topic, Please Click Here! (about 7 minutes long)




To hear the full Smart Money Radio Show where Bruce discusses this topic and more, Please Click Here! (about 25 minutes long)