The cardinal rule of investing is to “buy low and sell high.” However, investors historically have increased their allocations to stocks near the top of the market’s runs and decreased their allocations to stocks near the bottom of down markets. “As you may guess, movements in and out of the market are counterproductive for investors pursuing long-term goals because they end up buying when prices are high and selling when prices are low”, said MFS.
Resist the urge
No matter what the market is doing or what the headlines read, don’t let your emotions drive your decisions. Counter with a sound investment plan and a good financial coach. Whenever you have questions, concerns, or ideas, talk and work with your advisor, explain managers at the firm.
MFS recommends: “He or she may best be able to help you pursue your long term goals. Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested”.
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