December 04, 2008

Bailing out of the stock market

A number of my relations have moved their holdings out of the market for the safety of bonds, CDs, and money market accounts. It does not seem like such a great idea since getting out when the market is down is locking in your losses, the worst part of market timing. But what do I know?

Posted by LMC at December 4, 2008 07:03 AM | TrackBack

Unless you need the funds within the next five years, stand pat. Historically, the market always rebounds and there is no reason to think that in the long term your investments won't return to 2007 levels.

I know people who locked into heating oil contracts when oil was selling at $147 per barrel. Probably seemed like a good idea at the time but right now you would call that move insane.

Timing is everything.

Posted by: Gary at December 4, 2008 08:46 AM

As long as you can ride things out for five or so years before needing the money it's time to buy, buy, buy.

My husband, a bonified PhD in economics, wishes we had the spare cash to pick up some stocks.

Posted by: Sarah G. at December 4, 2008 01:49 PM