Individual Investors In or Out -Who Cares?

There is a saying in the investment world that goes something like this…If individual investors are on the sidelines, now is the time to buy. And, when individual investors are jumping into the market, now is the time to sell.
While there might be some substance in approaching the market this way, moneygal2020 says when investing into the market: ‘Now is the time to dollar cost average into the market.’ And moneygal2020 says when you are getting out of the market: ‘Now is the time to dollar cost average out of the market.’
Why use dollar cost averaging? Among some very good reasons is the fact that dollar cost averaging can help you keep your emotions from ‘helping you’ to make the worst possible investment moves.
In the long run, if you are jumping in and out of the market, transaction fees will hurt our overall return. Plus, jumping out of the market when it is down will only serve to lock in a loss. Yes, we lock in our loss, stay out of the market and miss the market recovery. You know, buy high, sell low??? Like I said. This is exactly the opposite of what we should do with our investments.
Predicting the ups and downs of the market is like trying to ride a bucking bronco – sooner rather than later you will be thrown.

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