A 1,200-point single-day gain in the Dow Jones Industrial Average shows investors why trying to time the market never works. UNO professor Mark Rosa says this shows why most investors need to ride out the swings.
"You bring yourself back to April and you think, 'oh, I've got to start selling my stocks and bonds and whatever else I have, my mutual funds,' and when are you going to buy back?" he asks, because anyone who panick-sold earlier in the year would have likely missed the rally, unless they're really lucky, or have a sixth sense.
"You're trying to time the market, it never works very well," said Rosa.
He says the investors who ride it out will do much better over the long run.
"The past 6 or 8 months, I know it feels like much longer than that. This is a drop in the bucket compared to what markets have done for us over the past three to four years," Rosa said.
Rosa says today might be a different story, as some investors sell to lock in the profits they made yesterday: "It wouldn't surprise me. A 1,200-point Dow day is quite a feat."
But everyone else, he advises, should stick to long term goals.
