Should we really invest in the stock market now? | Smart change: personal finance


(James Brumley)

It’s a tough time for investors, and not just because Halloween is around the corner.

On the one hand, there are a lot of stocks that are (still) performing well, so if you’re not in the market, you’re missing out. On the flip side, the indicators definitely suggest that the market is ripe for a major correction. Sticking to or entering stocks at this point could take a toll on the value of your portfolio. Should we really invest in the stock market now?

The answer to the question is, it depends. Fortunately, we know exactly what it depends on.

Image source: Getty Images.

What type of investor are you?

First of all, if you are wondering whether to pull out or look into this current market, rest assured that you are not alone. Even the pros can’t agree on what’s to come, in the short term or a bit later. It is not a surprise either. If anything about this business were perfectly predictable, we would all be millionaires by now.

With that as a backdrop, the smart money movement here depends on what you’re really trying to get out of the market.

If you are more of a trader and less of an investor, now is not the time to accumulate new positions. Indeed, now is the time to take a step back. The S&P 500 (SNPINDEX: ^ GSPC) is currently up more than 7% from its low in early October and more than 100% from the low last March when stocks collapsed after COVID-19 arrived in the United States. Both are unusually large gains for their respective time frames.

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