Plenty of folks are speaking up now saying, “I told you so.” Referencing their previous prediction that we were due for a pullback in the market. Funny, these same individuals were saying this when the Dow was at 12,000…and then at 13,000…and then at 14,000…and then at…well, you get the picture. Remember, when it comes to market timing, the benefit of potentially avoiding the downturns is outweighed by the risk of missing the “ups” because there is no certainty you’ll ever have a chance to make those returns back. Food for thought: Neither market nor economic fundamentals have changed dramatically. Housing is on the rise. Incomes and jobs are strengthening. New entrepreneurial technology is boosting productivity, growth and profits. Corporate balance sheets are as strong as ever. Liquidity is abundant. Excluding government, real GDP grew at a 5.1% annual rate in the fourth quarter of 2014, following a 5% growth rate in the quarter prior. In other words, as the government shrank, the private sector grew faster. This is a good thing. Anytime you think you know the future direction of the market, or think someone else knows, remember to treat the future with the humility it deserves. Read Carl Richards’ simple summary, linked below, of why the timing approach is largely futile. Stay diversified.
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