No we aren’t referring to the tango nor are we talking about the classic middle school dance anthem by Rob Base & DJ EZ Rock. We are talking about market timing. For many retirement plan investors, it is easy to get consumed with an onslaught of positive or negative news. Sometimes that news even drives us to the point of wanting to tamper with our long-term investment strategy.
What many of us forget is this “market timing” takes two decisions and unfortunately we have to get both correct. When to move to a more conservative allocation and also when to move back into our normal more aggressive long term allocation. During the past few months we have been inundated with political ads, COVID news, wild fires, and much more.
The news of the day may seem daunting but it also doesn’t really inform us as to where the market may go in the near future. Since markets are forward looking, information is constantly being priced into the prospects and prices of companies. As an investor, we must constantly remind ourselves that our participation in the markets while utilizing a globally diverse portfolio and saving at appropriate rates is the most important factor in our long term success, not making two decisions at the exact right time!