Common Financial Planning Mistakes #4: Timing The Market

In our top financial planning mistakes series, CEO Michael Conway of Conway Wealth Group discusses the myth that investors can time the market. Rather than listening to supposed stock gurus, block out the noise and invest with a long-term mindset.


Speaker 1: What’s next on our list of the top seven financial planning mistakes? Coming in at number four, timing the market. You’ve heard it before, buy low and sell high. It’s easy, right? Sadly, this seemingly logical and simple strategy has fooled millions of do-it-yourself investors time and again. Like most conventional wisdom, that strategy overlooks important nuance that can define investment success. To win the timing game, investors need to guess both the right time to get in and the right time to get out.

Here’s the catch. Markets are fickle and ultimately unpredictable. Every data point on the planet may suggest a stock will soon fall, but an irrational market may decide otherwise. Worse, the entire market could move in the opposite direction of widespread sentiment. Remember when most people said the market would nosedive if the US elected Donald Trump?

Here’s the [inaudible 00:01:16]. Build a diversified portfolio and maintain a long-term mindset. Stop trying to pick and choose specific sectors or companies. Data shows how often such a strategy fails when compared with the success of long-term passive investing. Block out the supposed market gurus claiming to have the silver bullet. It’s all noise.