No one can know for sure where the stock market will go next. But there are worrisome signs that investor optimism may have gotten out of hand. The recent exuberance of investors raises the question of whether they are making the same mistakes they made in the past — errors that could prove very costly down the line. If history is repeating itself, what can we do to protect our financial futures?
Is this the time to slash the amount of common stock? Despite all the legitimate worries, my answer is no. Trying to invest your money by guessing exactly when stocks may rise or fall all but invariably leads to poor results.
Market timing can ruin a well thought out investment plan. Just because the market is bipolar doesn’t mean you should be too.