Did you buy high and sell low?

Buying high and selling low is a formula for awful returns. 

Many investors thought they could take risk before they had experienced the pain of the recent losses. Panicked investors then rushed to safety.
  • "I thought: I can't afford to lose it all so, I recently reduced the 40% of my portfolio that was in stocks, to just 10% - the rest is in cash, bonds and federally insured certificates of deposit."
  • "I cashed out of my individual retirement account in early March to help pay the $1,200-a-month maintenance costs on my unsold home."
  • "When the $100,000 turned into $60,000 late last year, I worried we would lose our children's college money if we didn't get out of the market."
  • "But, we had to get out emotionally - math and the mind don't always add up."
  • "My folks need income, they need to know they can pay their bills....There was no waiting time for things to come back around."
  • "What if the DOW was selling at 3000 now? Selling at 6500 would have been brilliant. And you don't know that at the time of the decision."

"Their timing was almost perfectly bad!"

They were not alone. Professionals and newsletter writers were equally wrong:
Bob Brinker's advice (one of the most highly rated market timers that called the 2000 bubble and 2003 advance) made the following calls since January 2008: 
  • Mid 1400 on the S&P 500, he called it a "gift horse buying opportunity"
  • Market rallies back to 1400's in 2008 and he bashes the "Cassandras" (people predicting the market crash)
  • Market bottoms in 2009 at 676 and he has no buy or advice to dollar cost average in his newsletter just days before.
  • Market rallies significantly and he is a buyer on "weakness"
Most investors take more risks than they need to take, can afford to take or can stand to take.

Visible Investing is about seeing and understanding the risks you are taking and the returns you are seeking to achieve. 

Contact an advisor for a complimentary discussion of your current situation.

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