Time Not Timing
The financial markets—particularly the stock market—can fluctuate dramatically on a daily, monthly or yearly basis. However, trying to "time" the markets—getting out during periods of decline and jumping back in when the markets are on the upswing—is a risky and rarely-successful strategy. In fact, the practice may work against the goal for which investors ultimately strive—that is, buying low and selling high.
Although escaping the market during a downturn may feel like the "safe" thing to do, it may cost you dearly in the long run. Market downturns typically are temporary, and they often pave the way for periods of substantial gain. Selling your investments on a downturn and purchasing them again when prices are rising does nothing to promote long-term growth.
A better strategy may be to let time work its magic. When you stay the course and maintain your long-term investment strategy, making regular investments whether the market's rising or falling, you put time on your side, which may be the key to investment success. (see chart)
