All investors should read Dan Weiner’s article in Kiplinger’s about market timing for equities.
Basically, the article states that is it best to don’t even try to time the stock market as it does not work!!!
The most important lesson from the excellent piece in Kiplinger’s, which is a fine personal magazine, is to get in the market and stay for the long term. That is sound advice for investing in any asset class: get in early and stay late. That is why legendary investor Warren Buffett, “The Oracle of Omaha,” has stated many times that his favorite holding period for stocks is “forever.” It is also why Buffett buys “best in show” stocks such as Coca-Cola (NYSE: KO), ExxonMobil (NYSE: XOM), Wal-Mart (NYSE: XOM), and others.
This is shown by ExxonMobil, the world’s largest oil and natural gas firm, being down more than 8.3 percent for last six months of market action (chart below).
No one expected ExxonMobil to fall. That is shown by the short float being just one percent. Yet ExxonMobil is down for the last week, month, quarter, six months, and year of market action. Those holding a short position could have done very well with ExxonMobil. But, over the long term, it will be investors like Buffett who do the best.
That is shown by the research from Weiner’s article.
Over a thirty year period, those investing in stocks at the worst possible day did almost as well as those who dollar cost averaged (buying at the same time). The most important factor was to buy stocks and stay in the market for the long term. Stocks that pay dividends like Coca-Cola, ExxonMobil, and Wal-Mart make it even more rewarding. All assets should produce a stream of income. For income investors, the long term is the most rewarding as Coca-Cola, ExxonMobil, Wal-Mart, and others have a history of increasing the dividend. From that, long term investors get a raise simply for not selling the stock.
Weiner’s article makes the long term outlook even more compelling for investing in the stock market!