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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75336  
Subject: Re: 4% Rule -- Common Misconceptions Date: 9/1/2011 1:46 PM
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"I think its important to keep an eye on the market and be sure to participate to the fullest when times are good. In bad times, you have to retreat and hunker down. But ideally you make enough in the good times to cover the bad."

The problem here is that market tops and bottoms are not marked. People tend to retreat and hunker down, meaning selling at the bottom. They think the bad times will continue. Technicians call this "capitulation".

And then, when do you get back in? When the market has already come back to where it was before the previous correction?

The best solution, for most of us, is simply to stay invested all the time, and regard it as a buying opportunty when stocks go on sale.

Best wishes, Chris
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