By Indexopedia Research Team | October 1, 2024 | In
Today, many investors are gripped by the fear that the market is overvalued and poised for a correction. But history teaches us that trying to time the market is not only difficult–it can be disastrous. Instead, we believe a balanced, well-constructed portfolio that focuses on spreading risk is key to long-term success. One such approach is the classic 60/40 portfolio, where 60% of assets are allocated to stocks and 40% to bonds. Why Predicting the Market is a Fool’s Errand The stock market has a long history of reaching new highs. It’s often at these peaks that investors become wary, convinced that a correction is imminent. While it’s true that corrections and downturns are part of the market’s natural cycle, predicting their exact timing is virtually impossible. Market momentum can persist for years even if you think they’re overvalued, and even when a downturn occurs, knowing when to re-enter is equally challenging. Take, for example, an investor who sold their stock holdings in 2013, believing the market was due for a correction after strong gains post-2009. They sat in cash, waiting for a downturn that