Timing the market is futile. Recall March 9, 2009. Unemployment was skyrocketing, large banks like National City and Washington Mutual had been shut down, and GM and Chrysler were teetering on the edge of bankruptcy and threatening to take down the whole automotive supply chain with them. Things were bad and more bad news was ahead of us. What a foolish time to invest in stocks! Yet, that was the bottom. Why? Because the sellers had finished their selling. However, they don’t issue memos to let others know it is okay to invest again. But from that point, in fits and starts, the market recovered. Eventually, the economy recovered as well.
The stock market hit its recent low on June 17th with the Dow dipping below 30,000 and the S&P 500 reaching 3,636. Since then, stocks have staged a significant rebound despite negative sentiment in the business and investing communities. At recent quotes, the Dow and S&P have risen 13% and 18%, respectively, from their June lows but remain 8% and 11% below their all-time highs. The tech-heavy NASDAQ, once down 35%, has rebounded 24% but is still down 19% from its high.
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