The stock market has made wild swings throughout the pandemic, giving investors plenty of chances to profit.
This week stocks have fallen, partly due to the uncertainty of growing coronavirus cases in the Midwest and across Europe and the coming election, which is sure to set the market swinging again. That may have investors tempted to bet big and time the market.
But CBS News Senior Business Analyst Jill Schlesinger advises people not to try that, unless they are willing to lose their investment, as the election's impact on the stock market can be extremely volatile and short-term.
"Before coming into the 2016, everybody was feeling like, looking at the polls, Hillary Clinton's going to win. And people were telling me who were big money managers, if somehow or another Trump wins, it's going to be a big disaster. And they were right – for an hour and a half," she said. "And guess, what? Everything came back."
Schlesinger says that timing the market is more similar to gambling than to financial planning, as even the most seasoned investors cannot predict the future.
Some individual stocks have made wild swings as well, for better and worse. When stocks like Tesla or Zoom continue to rise far beyond people's projections, it can be tempting to hop on the bandwagon.
But Schlesinger says far more people bet wrong than bet right.
"I find that people ask me these questions usually at the top of a bull market, and they rarely ask that question when things collapse," she said. "So believe me when I tell you in March that I got thousands and thousands of emails from people who were wanting to blow out of everything including Apple and every other great stock that's out there, and very few people who said, 'I want to be opportunistic, what can I buy right now?'"
She advises people to make sure that they have the basics covered first before trying to take advantage of an unpredictable situation; that means setting aside savings for an emergency, paying off your debt and maxing out on your retirement contributions.
"I would allow the other people to try to time the market," she said. "Stick to your game plan."
