There is only one way a long-term investor can guarantee they lose money; selling at the wrong time.
By “selling at the wrong time,” I mean selling after a market crash. Generally speaking, investors do this for one of two reasons.
- They choose to time the market.
- They are forced to time the market.
Choosing to time the market is a topic that many financial writers have covered. However, being forced to time the market and sell at the bottom can have much more devastating consequences and is not discussed nearly enough.
In this article, I discuss how some simple financial planning can help you avoid this painful mistake: