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Avoid Mistakes: You Should Never Try to Time the Markets

'Pro' Timers Lose 90% of the Time. What Are Your Odds?

Looking backward, market timing appears to be a perfect strategy. To make huge profits just buy at market troughs and sell near market peaks. Anyone can look back in time, plot market levels, and then find some indicator that coincidentally exhibited a particular behavior each time the market changed course. Unfortunately, there is no reason this behavior will necessarily predict another market move.

The fact is, no one can know when the market will rise or fall. Despite ads and brags to the contrary, no system of predicting tops and bottoms actually works. If such a system did work, computer programs would already be utilizing it and the owners would not be telling you about it. Many people have invested at what looked like market bottoms only to discover they bought near the top of a much bigger decline. More commonly, many individuals hold back on buying stocks, waiting for a dip of some sort, only to miss out on most of the appreciation. Nine out of ten professionals who try to time the markets lose money in those attempts. You are wise to avoid the practice.

How P3 Can Help

P3 presents a number of strategies you can use to make sure you don't simply put all your money in the market at a "top", or take it out at a bottom. Often, the best time to invest is when things look worst. If one invested $1,000 in the S&P 500 at the beginning of 1960and simply held on for the next 50 years, one would have accumulated over $100,000. If one made the same investment but missed only the top 20 up days out of about 12,500 business days, one would have accumulated less than $32,000.  Through program modules, newsletter articles, and Investment Club forums, P3 presents rational investment concepts and actionable ideas that do not rely on guessing changes in market direction.