Can you Time the Market?

A lot of people ask me, 'Is this a good time to invest? How much should I invest in this thing? How much should I invest in that thing?' And what I feel a lot of people are asking is, 'How can I time the market?' And I'm here to tell you that you can almost never time the market perfectly. That's why I tell everyone: don't try to time the market. Actually, increase the amount of time your money will spend in the market. What I mean by that is there is never a bad time to invest.

The S&P 500 Index has grown 10% or more over the last 50-plus years. When you look at it over a 30-year period, even if you invest today and you think the market is a little bit frothy, you will still come out ahead in 30 years' time because it grows 10 or 12% over a 30-year period.

Also, if you are going to try to time the market, you have to be right multiple times: one, when you buy something, and two, when you sell something.

Let's say you think that stock XYZ today is really cheap and you should invest in it. Well, one, you have to be right that it's really cheap and it's low right now. And let's say in a month, you think it's gonna pop, it's gonna go up. Then you have to be right again in a month so you can sell it for a profit. If you're not right on either end, you are likely not to make money. But let's say you think XYZ is actually a good company and you think it will grow over a 10-year, 20-year time period.

You buy XYZ stock today and you don't worry about timing it because you're going to hold that stock for a long time. And after 10 or 20 years, it would have grown so much that you can sell it any day of, you know, in the market, and you will still make a profit. So, invest for the long term. Please don't trade. Buy great companies and hold them.