Ask a silly question...

Every once in a great while a client will ask me "Marty, if you see something coming, will you reduce my exposure to stocks?" Of course he/she would either be a brand new client whose expectations have yet to be tempered, or a client who's spending too much time watching CNBC and too little time reading my blog. My reply is typically "you know, if I could see things coming, I'd be seeing the French Riviera from my 300 foot yacht right about now".

In their book Valuing Wall Street, Andrew Smithers and Stephen Wright explain why reliably predicting the ups and downs of the market is impossible:

...it cannot be possible to make reliable predictions about when the market will rise or fall. If it were possible, the market would respond in advance and it could not then rise and fall in the way it does. The fact that market timing must be unpredictable, but that investors nonetheless clamor to know when things will happen, is probably the single main reason why so much nonsense is written about the stock market. It is an old English adage that if you ask a silly question, you will get a silly answer. [like my 300 foot yacht]