NEWS YOU CAN USE: You Can’t Time The Market.

Unless maybe you’re planning to retire tomorrow. Are you planning to retire tomorrow? I don’t mean “soon.” I mean, are you planning to retire on Aug. 25, 2015? Because if not, there’s no reason for you to be looking at the day-to-day movements in your 401(k). You probably lost a lot of money in the last week. And you know what you can do about that? Nothing.

Oh, sure, you could try to time the market by selling now, waiting for it to bottom, and buying back. A lot of people get rich doing this in novels, particularly novels set in the Great Depression. You know why they’re able to do this? Because the author gets to cheat; they have the prices right there in front of them, and they can whisper them to their character, maybe along with a plausible rationale as to how they should know this is the top, and then recognize the bottom when it comes along. In the real Great Depression, a lot of people took a bath attempting this strategy, because what they thought was the bottom turned out to be a temporary pause before the market dropped into the basement, then got out a pick and a shovel and started digging through the bedrock.

Ah, but financial professionals will protest that many people in their industry do sell into a crash and then pick up assets on the cheap. True, though my experience is that you are more likely to hear about the times this was a winning strategy than the times when it was not. More importantly: Are you, dear reader, a financial professional who spends all day glued to the market data feed, watching for the bottom? Or are you the sort of person more likely to park some cash in your trading account in preparation for that golden moment to buy … and then forget about it for six months because Mom had a nasty bout with pneumonia right after you had to shepherd Junior through the college application process?

Attempting to time the market, like most other active trading strategies, produces at best a modest premium that roughly pays for the work needed to generate the excess profits. (At worst, you lose much more in herd behavior and trading fees than you gain in value.) But that’s for people who do this for a living. The odds that you, who have so many other things to think about, are going to wade into the market and outperform the professionals are approximately the same as the odds of you getting up out of your armchair, wandering down to the nearest major league sports arena, and outperforming the folks on the field.

Even professional money managers seldom beat the market for long.