“The truth, based on 60 years of my own experience. The average American should not be in the stock market. Why? Because they tend to buy at the top third of a bull market, and they tend to sell at the bottom third of a bear market. Why do they do that? Because 90% of their actions are a product of their emotions, and emotions are your worst enemy in the stock market.”
again, quote above from Richard Russell yesterday [Richard is 83 and has been watching / analyzing the markets on a daily basis for 60 years – he is one of the few financial analysts old enough to have actually seen ‘hard times’ as an adult (as opposed to that snot-nosed college kid posing as a ‘financial adviser’) – Richard’s daily newsletter costs $300/year which is dirt cheap for his wisdom – about Richard: http://ww1.dowtheoryletters.com/%5D
what Richard is saying above is that the average investor doesn’t have a clue when to get in or out of the market so they do so based on the emotions of greed and fear – when the markets are moving up they think they are missing out on ‘free money’ so they buy into the top third of a bull market – near the bottom third of the following bear market they sell because fear has finally gotten strong enough
Wall Street tries to ‘help’ the average investor by acknowledging the investor’s lack of knowledge and providing them with a strategy: buy and hold and dollar cost averaging
