It is not possible to buy low and sell high on a regular basis to beat the market. Majority of investors should take a long-term view and invest in low cost index funds and use dollar cost averaging to buy stocks and bonds and don't panic buy or sell.
Sharp Decline and Sharp Rebound
Recap on beginning of 2022 where the stock market was in its worst performance till 16 June 2022 as news of high inflation, Ukraine war, rising interest rates and the threat of recession contributed the dismal performance.
However, on 17 June 2022, the stock market turn around and continue to went up for 2 months. From its bottom, the S&P 500 gained 17.4 per cent; with dividends. So, if you don' follow the markets closely, it it understandable if you did not notice that the 17.4 per cent rally ever happened.
To conclude, when market decline as it did early this year in 2022, it paid not to panic. If you had sold during the decline, you would have missed out the substantial gains of June, July and August 2022. It is better for you to remained calm while losing money in the stock market.
Important thing is separate your reserve cash from your investment money. Setup an auto investing plan to invest something like the S&P 500 ETF using DCA with decades time horizon and keep your emotion out of investing.
