This is interesting for sure, but as a person doing only slightly better than the national average income, I am not sure there’s much I can do to protect myself. I have an IRA and 401k but I don’t manage those accounts. Besides, I’m not planning to retire or cash out anytime soon, so I’m not very concerned.
That’s usually the best approach to take. Timing the market is proven to be damn near impossible, so hard that it’s almost certain to result in a worse outcome than riding through ups and downs, especially when it comes to long term investments like retirement accounts. The fluke examples fill us all with fear of missing out, but it’s truly not a sound strategy. It’s gambling (unless they actually have insider information, of course, then it’s illegal).
The only caveat is mainly for people who are actively living off their investments. For them, it’s crucial to always keep enough cash on hand to avoid selling during downturns. They should be regularly selling off (or have sufficient interest/dividends) when times are good so they can ride through major drops without selling.
As long as you’re diversified and don’t sell at the bottom or miss out on the ride up, you’re almost certain to see excellent rates of return over the long term.
This is interesting for sure, but as a person doing only slightly better than the national average income, I am not sure there’s much I can do to protect myself. I have an IRA and 401k but I don’t manage those accounts. Besides, I’m not planning to retire or cash out anytime soon, so I’m not very concerned.
That’s usually the best approach to take. Timing the market is proven to be damn near impossible, so hard that it’s almost certain to result in a worse outcome than riding through ups and downs, especially when it comes to long term investments like retirement accounts. The fluke examples fill us all with fear of missing out, but it’s truly not a sound strategy. It’s gambling (unless they actually have insider information, of course, then it’s illegal).
The only caveat is mainly for people who are actively living off their investments. For them, it’s crucial to always keep enough cash on hand to avoid selling during downturns. They should be regularly selling off (or have sufficient interest/dividends) when times are good so they can ride through major drops without selling.
As long as you’re diversified and don’t sell at the bottom or miss out on the ride up, you’re almost certain to see excellent rates of return over the long term.