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How to Beat Market Timers

Timing the Market vs. Time in the Market

If you were just going off what you hear from friends and family members at social gatherings, you might think everyone hits it big when they trade stocks. People are eager to tell you when their risky investments make money, but they are less forthcoming about all the busts.

Trying to time the market to get that “big win” is a risky endeavor. Ben Carlson from A Wealth of Common Sense wrote an awesome post back in 2014 that introduced us to Bob, “The World’s Worst Market Timer.”  We absolutely love how this post addressed a common bias where many investors overestimate their market timing skills or underestimate the role their emotions play in their investment decisions.

In this week’s episode of The Money Guy Show, we unpack the cautionary tale represented by Bob, “The World’s Worst Market Timer” and highlight where Bob goes wrong and what his potential outcomes could have been if he did things differently.

Tune in to learn from Bob’s mistakes, and find out what you can do differently with your own finances to stay on the path to financial freedom.

Here is a preview of what you’ll find out in this episode:

  • Who is Bob and what can we all learn from his story
  • What happened to Bob since his story became public in 2014
  • Why dollar-cost-averaging is a powerful tool and how to apply it to your own investments
  • How fear can lead to some pretty terrible financial decisions and methods to reduce or altogether avoid emotional investing
  • What makes market-timing so dangerous for investors
  • How Bob turned $184k into $1.7m
  • How Bob could have turned $184k into $4.3m!
  • Why automating your cash management into your investments is such a smart thing to do
  • How to think about lump sum investing vs. dollar-cost-averaging, and how to know which one may serve you better in the long run
  • When it might be a good time to call on a financial professional to help you decide between lump sum vs. dollar-cost-averaging

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