Anybody who sells stocks because the market is up or down is a market timer for sure.

Anybody who sells stocks because the market is up or down is a market timer for sure.

A market timer tries to predict the short-term zigs and zags in stock prices, hoping to get out with a quick profit. 

Few people can make money at this, and nobody has come up with a foolproof method. 

In fact, if anybody had figured out how to consistently predict the market, his name (or her name) would already appear at the top of the list of riches peole in the world, ahead of Warren Buffett and Bill Gates.

Try to time the market and you invariably find yourself getting out of stocks at the moment they've hit bottom and are turning back up, and into stocks when they've gone up and are turning back down. 

People think this happens to them because they're unlucky.  In fact, it happens to them because they're attempting the impossible.  Nobody can outsmart the market.

People also think it's dangerous to be invested in stocks during crashes and corrections, but it's only dangerous if they sell.

They forget the other kind of danger - not being invested in stocks on those few magical days when prices take a flying leap. 

It is amazing how a few key days can make or break your entire investment plan. 

Here is a typical example:  During a prosperous five-year stretch in teh 1980s, stock prices gained 26.3% a year.  Disciplined investors who stuck to the plan doubled their money and then some.  But most of these gains occurred on 40 days out of the 1,276 days the stock markets were open for business during those 5 years.  If you were out of stocks on those 40 key days, attempting to avoid the next correction, your 26.3% annual gain was reduced to 4.3%.  A CD in a bank would have returned more than 4.3%, and at less risk.

So to get the most out of stocks, especially if you're young and time is on your side, your best bet is to invest money you can afford to set aside forever, then leave that money in stocks through thick and thin. 

• You'll suffer through the bad times, but if you don't sell any shares, you'll never take a real loss. 
• By being fully invested, you'll get the full benefit of those magical and unpredictable stretches when stocks make most of their gains.