What a wild ride 2016 has been so far. The stock market has already experienced a double digit drop and a substantial rally. There isn't much to say that we haven't said already.
Investors were reminded once again that market timing is very hard to do. I am not here to pick on anyone because we are all wrong at times but avoiding wild predictions is usually a good idea. In mid January the Royal Bank of Scotland came out with a "sell everything" recommendation. They claimed oil was headed to $16 a barrel and markets were going to continue their drop. Almost immediately both Oil and the markets rallied. Famed investor, Doug Kass, also came out and said it would be a smart idea to start shorting the markets*. Again, awful timing. These were not the lone doomsayers. They were coming out of the woodwork in January.
In fairness to them, the global economy is still on uneasy footing and there are plenty of things to worry about, but when is there not?
Could they be right later this year? Maybe but no one really knows.
We always emphasize that the most important part of investing is not your rate of return, it is managing your risk and being diversified. Let the returns come. Fear and/or being over exposed can lead to irrational decisions. There are mostly uncontrollable variables when investing. As the investor, however, you do get to dictate your level of risk.