Consequences of Market Timing: Bull Market Leaving Some Behind

Market timing is exhausting. And often, it can be expensive. When you time the markets, you have to be right twice – first when getting out and second when getting back in.

In the accompanying chart, you can see individual investors remain mostly “out” despite the stock market’s 2023 rally.

When people use market timing to get out of the market, even when they become more upbeat about stock prices, there is usually still much skepticism. Mental blocks can cause investors to be hesitant to make investments. After all, it can be challenging to break from a bearish mindset if you’ve been in that camp for a while.

Allos Bear Market

With investing, it's critical to “tune out the noise” and focus on what you can control. Having a strategy aligned with your goals, time horizon, and risk tolerance is critical, and it can help you stay focused when market sentiment turns negative.

There are always going to be unsettling news headlines and economic situations that can spook a market timer. There will always be a reason to stay on the sidelines if you’re looking for one. We are here to help if you’d like to tune out the noise and let our team help you navigate your investments backed by a solid plan that works for you.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Allos Investment Advisors®, LLC.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.

Published for the blog on July 24, 2023 by Allos Investment Advisors®, LLC.


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