Many people get caught up in timing the market — when to buy an investment — influenced by either of the two emotions, greed or fear. Here’s why this never works.
First, greed compels people to buy when the stock market (and a fund’s unit value) is high, which is referred to as a bull market. Conversely, fear causes many to sell when the stock market’s value (and a fund’s unit value) is low, which is referred to as a bear market. However, it is your time in the market, not timing, that counts. When you stay the course, investments generally return and exceed their historical value.
Consider regular investing
Make regular investments in promising companies to benefit from what is referred to as dollar-cost averaging (DCA) to level out the peaks and valleys of the market.
Don’t just look at a mutual fund’s most recent performance. Instead, look for long-term investment performance over one, three, five and ten-year periods.
Make investment decisions with the help of a professional advisor with investment managers on his or her team. Professional expertise helps you avoid fear and greed in investment decisions in which a difficult choice has to be made between two or more alternatives.
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