• Skip to main content
  • Skip to primary sidebar

Ask Liz Weston

Get smart with your money

  • About
  • Liz’s Books
  • Speaking
  • Disclosure
  • Contact

Q&A: Investors need to stop trying to time the market

April 17, 2017 By Liz Weston

Dear Liz: My 25-year-old son is a new investor. He put $11,000 ($5,500 each for 2016 and 2017) into an IRA in a money market fund with a discount brokerage firm. He doesn’t want to get into the market yet because he thinks it is in a bubble. I’m afraid with this strategy, he could be sitting there for a long time losing out to inflation. How would you present this argument?

Answer: You might ask him when he plans to enter the market. When stocks fall 10%? 20%? More? If stocks do tumble to his target level, there are likely to be plenty of scary headlines indicating that the market could fall further. Will he be able to follow through on his plan or will he put off investing — and miss the inevitable rise that will follow?

Newbie investors, and even some more experienced ones who should know better, often think that they can time the market. They can’t. They’re better off diving in with a well-diversified portfolio and adding to it regularly without worrying about the day-to-day swings of the market. Your son won’t need this money for decades, so there’s no sense fretting about what might happen tomorrow or next week. Over the next 40 years, he’ll see significant gains — but only if he gets off the sidelines and puts his money to work.

Related Posts

  • Q&A: Here’s why trying to time the stock market is a really bad idea

    Dear Liz: I confess that I am one of those people who panicked and sold…

  • Stop balancing your checkbook

    Think about how difficult it was to clean a house 100 years ago, or make…

  • Q&A: Riding the market waves

    Dear Liz: Today’s stock market is one of the most volatile of all time. So…

  • Stop counting other people’s money

    Your neighbor pulls up in a sweet new ride. Your co-worker announces she’s taking yet…

Filed Under: Q&A Tagged With: Investments, q&a, stock market

Primary Sidebar

Search

Copyright © 2025 · Ask Liz Weston 2.0 On Genesis Framework · WordPress · Log in