The big up and down swings that have defined the market lately have many wondering whether they should get in, or get out. However, Walter Bettinger, president and CEO of Charles Schwab, has a piece of advice for investors–don’t try to time the market.
“Guessing the market is just so difficult,” he said. “When you time the market, all you end up doing is timing losses.”
Bettinger said investors should develop an investment plan that has a long-term perspective and is diversified. However, there is one thing he thinks should be at the core of every portfolio.
“I think every portfolio has to have a weighting in U.S. stocks,” Bettinger said. “We’re still the strongest, largest economy in the world. Our stock market is the most liquid.”
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But even more important than what you put in your portfolio, he added, is understanding how much risk you can tolerate.
The financial crisis “made a lot of people sit up and take notice that maybe their risk tolerance was a little bit less than they had been investing at,” he said.