Investment plan with a long-term goal is a life raft in rough times

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Opinion | Investment plan with a long-term goal is a life raft in rough times

As investors we’re constantly told not to bother trying to time the market. Study after study shows the deck is stacked against individual investors and even professional fund managers who try to consistently beat broad market indices.

A plan forces you to think about the level of volatility associated with the investment and to act in terms of an appropriate strategic asset allocation to manage that volatility. Attempting to move in and out of the market can be costly, particularly because a significant portion of the market’s gains over time have tended to come in concentrated periods. Many of the best periods to invest in stocks have been those environments that were among the most unnerving. When the market drops the value of assets drops as well, which means a larger number of shares can be purchased if investments are constantly made when the market declines.

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