6 LONGISLANDPRESS.COM • SEPTEMBER 2020
THE RISKS OF MARKET TIMING
“Market timing” is the strategy of
trying to predict when stock prices will
rise and fall and attempting to buy low
and sell high. While this seems to make
sense in theory, it’s extremely difficult
to pull off successfully. Trying to time
the market may mean missing out on
potential gains. Typically, you can’t
accurately pinpoint a market high or low
point until after it has occurred. If you
move your money out of stocks during
a low period, you might not move your
money back in time. By the time you
realize stocks are on an upswing, it
may be too late to take advantage of
gains. Instead of trying to time the
market, you may be better off with a
well-coordinated investment strategy
that is based on your personal risk
tolerance and time frame. While past
performance is no guarantee of future
results, the stock market has always
recovered from every downturn. Keep
in mind that rebounds can sometimes
occur quite rapidly.
Remembering Rebounds
It’s never clear exactly when the
market will recover from a downturn.
Investors who move out of stocks at
a low point may miss out on a future
recovery. Take a look at these historical
examples of market rebounds:
Year of loss: 1990 -3.1%
Following year rebound: 1991 30.5%
Year of loss: 2002 -22.1%
Following year rebound: 2003 28.7%
Year of loss: 2008 -37%
Following year rebound: 2009 25.5%
From this history, what we have
learned is that attempting to pinpoint
market highs and market lows may
result in lower returns for investors.
Additionally, the average investor often
times is lured into timing the markets
based upon emotion…be it rational or
Paul Celentano, Wealth Management Advisor/
Portfolio Manager
irrational. In the current environment,
one froth with much uncertainty, it has
never been a better time to have a wellcoordinated
strategy. If you have any
questions or would like further insight,
please don’t hesitate to reach out via
phone at 516-634-1301 or by email at
paul.celentano@owmanagement.com.
S&P 500 Average Annual Total Return Source/Disclaimer: Sources: Standard and Poor’s and DST Systems, Inc. The S&P 500 is an unmanaged index of the stocks of 500 major corporations. These returns are for
illustrative purposes only and don’t reflect the returns of any specific investment or the returns that an investment in stocks may earn in the future. It is not possible to invest directly in an index. Index performance
does not reflect the effects of investing costs and taxes. Actual results would vary from benchmarks and would likely have been lower. Past performance is not a guarantee of future results.
At OWM we strive to empower our clients with
dynamic and objective strategies that help
them build, enhance and importantly protect
their wealth. We work to get our clients to think
outside the box, set clear goals, and have realistic
expectations.
• Concentrated Equity Strategies
• Stock option/Executive Compensation Planning
• Tactical Portfolio Management
• Fixed Income/Debt Securities Solutions
Dynamic
Strategies,
Objective
Advice
50 Merrick Rd. STE 202
Rockville Centre, NY 11570
516-634-1300 • www.owmanagement.com
Paul.Celentano@owmanagement.com
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