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Typically, no. It's been shown time and time again that people cannot reliably time the market. If they could, with leverage you could become the richest person on the planet in a short time. You have to understand that if indeed people could in general know that the market was going to crash, then people would have already sold, and the impending crash would already have been priced in. It follows from that, that the current price essentially is our collective best guess at what the future will bring, including any expectations of recessions. Selling beyond that point means you're seeing something that nobody else does, which either makes you a genius (or lucky), or wrong, and the odds are typically not in your favour. You can find articles on recession indicators flaring up every month for the past decade. Suppose we had no sense of time, and just a sense of the daily weather to track the seasons. A few warm days in a row may indicate summer has landed, or it's just a normal fluctuation, a few weird days as winter turns to spring. And vice versa with cold days. There'll always be some indicators which may signal something bigger, and it could be just noise, or it could be truly indicative. You don't really know until after the fact. And if you could predict it, then it's likely everyone else could, too, and it'd have already been priced in so trying to time the market tends not to work. This simplifies things a bit, but unless you're close to retirement (at which point you should reduce your exposure to volatile asset classes like stocks anyway), time in the market beats timing the market. There's lots of interesting articles on this like https://awealthofcommonsense.com/2014/02/worlds-worst-market...) |