Getting out of the Market

It is never wrong to get out of the market. Contrary to popular rehtoric that you will miss the upside if you are out of the market, trading stocks is more about surviving to play again than it is about waiting in the deep water for the next wave to shore. There are times when making money in stocks is fairly easy and simple and there are times when it is nearly impossible properly assess risk or hedge your trades. You hear it on television everyday that you need to be in the market so you don't miss the next bull run but it is just not true. The large funds who manage all the 401 k money and large mutual funds are the only people who benefit from you keeping your money in the game during a bear market. They get paid fees that are often based on percentages of money managed rather then on performance. The hardest thing to do after a down turn is to take out your money because the desire to get it back becomes stronger with every loss. If you have any way of paying bills during market corrections, such as the one now in 20007-2009, you would be much better off not trying to fight the market. If you are using your own funds or managing someone's money you will have to be the contrarian and stand firm with your advice. You can lose money quickly in bear markets but if you are a good trader and keep enough in your pocket to try again when the bear leaves town you can make back all of the losses in short order. If you ride out the storm by staying all in you might end up with nothing left take advantage of the easier opportunities. Fear and greed are aways the drivers of the market. The most unusual time to see greed drive decision making is after major losses. Even if it is still during the teeth of a bear market, people tend to become more greedy and will fall for the notion that you have to be in the market at all times to catch the rallies. They have a stronger feeling of greed take over and it often overshadows their fear of more loss. It is this time when the next down leg can wipe out the last survivors and cost them their chance being around for the bottom.