It's Impossible To Time The Market—But It Doesn't Mean You Should Ignore Volatility

Without a question, the stock market is erratic. You cannot, however, ignore the reality that it has been rising upward and is most likely to do so in the future.

You need to be aware of when one trend ends and another one begins if you wish to time the market. This may be simple at times, such as when there is a bull market and every new high appears to portend more gains. Other times, though, you may feel as if your plans have been thrown into a loop.

Take Friday's decline as an illustration. It was brought on by reports that China had put tariffs on $60 billion worth of American-made goods, a move that might harm both American businesses and farmers given that China provides 20% of the soybeans and ham produced in the United States.

If investors had still been holding equities after the close of trading on Thursday afternoon, the roughly 1% decline in the Dow Jones Industrial Average DJIA, +0.26% would have been sufficient for many of them to sell them out of fear of more losses. The Dow finished down only 0.2%, marking its eighth gain in nine sessions so far this year (and almost matching its gains from January through July), so the selloff didn't continue very long.