For the past two months, the market declines and market rallies have been historic, as COVID-19 introduced a level of uncertainty that was difficult to quantify, let alone predict. And if the stock markets hate one thing, it’s uncertainty.
You think you could have timed that perfectly? Unlikely. In fact, if you let your emotions dictate your investing decisions, you would have likely sold during March and were sitting on the sidelines in April – so you lost out twice.
The month of March and April are great reminders of why it’s important to invest for the long-term and not make knee-jerk reactions to sudden market declines (or upswings). Need more proof?
Be honest: do you really think you – or anyone else for that matter – could have perfectly timed the 12 trading days from March 9th to 24th? Remember that:
Trying to pinpoint the right time to invest in the stock market is an exercise in futility. If you have a longer period to save, owning equities provides one of the most effective hedges against inflation and taxation available. Since it is impossible to know where the market might go from here, it makes sense to start investing now and continue investing on a regular basis, regardless of market conditions. Remember: long-term investment success is achieved not by timing the market, but by time in the market.