But over time, those good feelings might fade if you missed
out on market rebounds.
While moving assets into cash may help guard against short - term market volatility, don't forget it comes with the risk of missing
out on market rebounds.
Not exact matches
Unfortunately, many of those investors made the wrong move at the wrong time — selling near the
market bottom and missing
out on the
rebound that occurred in 2009.
Corelogic's head of research Tim Lawless said the jury was still
out on whether the housing
market had peaked given previous strong
rebounds in 2015 and 2016 following dips.
While short - term
market volatility may be scary, selling when stocks fall and trying to wait it
out on the sidelines can create other problems, like figuring
out when to get back in and missing
out on a potential
rebound.
This can result in missing
out on significant gains as the
market rebounds.
As a result, the low - risk part of the portfolio had a higher allocation compared to target and the portfolio missed
out on some of the strong
rebound in the equity
markets.
Momentum, for example, was the top - performing factor in 2007 when equity
markets were strong, but it was the worst performer in 2008 when the global financial crisis hit.3 These swings in performance can be unsettling to many investors, causing them to sell and potentially miss
out on rebounding performance.
That's important because you don't want to go into a
market meltdown with too much in stocks and end up bailing
on equities at the
market bottom — or have less than you should in stocks after a crash and miss
out on the gains when stocks
rebound.
One of the most common pitfalls for investors is their tendency to chase returns in the
market; that is to say, many investors are prone to being lured by «hot» names
on Wall Street that are making big gains, as opposed to focusing
on the «
out of favor,» high - quality companies that may be due for a
rebound.