We’ve all heard about the instant millionaires who time the market just right, buy low and sell high, and live happily ever after, right? It sounds like a fairy tale…and that’s because it is. You might get lucky trying to play the market like that once or twice, but in general, trying to get rich during periods of volatility will get you broke instead. That’s because based on history in the market, we know that like the fable about the tortoise and the hare, slow and steady is what wins the race.
This piece from Putnam Investments, Invest for the Long-Term, means just what it says. While it’s tempting to sell when the market falls, what happens when the market eventually recovers? You miss the rebound, and your long-term strategy just got canned. We develop financial plans for a reason, and financial professionals like myself typically recommend staying the course because that’s what tends to generate the best outcomes.