Another top strategist who is discussing the perils of market timing is Charles Schwab Chief Investment Strategist Liz Ann Sonders.
In her latest market commentary, written with Schwab’s Brad Sorensen, Sonders says that investors who remained on the sidelines waiting for the market to turn downward missed out on some strong first-quarter gains. “This again helps illustrate the dangers of trying to ‘time’ the market,” she and Sorensen say. “Investors who were waiting for a sizable pullback before investing more in stocks missed another nice upward move. We continue to urge investors who have not done so to bring their equity allocations up to appropriate levels given investment time horizons and risk tolerances.”
Sonders and Sorensen say they are “relatively optimistic” that stocks will continue to climb. Earnings will likely drive the market over the next few weeks, they say, though they stress that investors should take a longer-term perspective. “Although pullbacks will undoubtedly occur, especially now that investor sentiment (a contrarian indicator) has become more optimistic, we believe they will be relatively brief,” they write. “Investors remain somewhat skeptical about both the stock-market rally and the sustainability of the economic recovery, leading to investor sentiment correcting relatively quickly with any pullback and setting the stage for a renewed move higher.”