Americans love betting on sports. It’s estimated that hundreds of Billions of dollars are wagered every year on football alone. Sports gambling is growing in popularity as more states legalize it. and it’s estimated that, conservatively, the industry is worth $150 Billion. Baseball may be “America’s Pastime”, but betting on it might be America’s Passion.

Of course, speculation for monetary gain isn’t confined to sporting events. Millions of people have tried their hand at trading stocks over the centuries. Jessee Livermore (1877-1940) once wrote:

Livermore Himself Famously made over $100 Million trading stocks in 1929 only to squander it and die with only $10,000 in assets and hundreds of thousands in debt.

Stocks go up and down daily for a variety of reasons; the world is constantly presenting us with new events, successes, and problems. It’s only natural that we might want to make investment gains (or avoid losses) by trading our investment accounts based on what we think might happen. Outside of the tax and fee implications, ask yourself these 3 questions before you decide to make investment changes:

1. If I sell out of the market because of (event), does that mean I have to stay out until the (event) is “over”?

For example: If you went to cash before the pandemic, are you waiting on a vaccine or the all-clear signal from public health officials? Or, If you’re in cash for the election and your guy doesn’t win, do you wait for the next election to get back in?

The truth is, millions of things happen every day. How do you decide which things seem big enough to bet on? How frequently should you decide to play this game?

2. If I’m wrong, and the stock market moves higher, when do I re-buy? Or – If I’m right, and stocks move lower, when do I re-buy?

Timing the market is ill-advised, and there are hundreds of successful investors who will tell you why. Rather than quote Warren Buffet, we’ll just let this chart from Fidelity do the talking:

3. Who else knows what I know?

Or- Is that already priced in?

In March 2020, a record 3.3 million people filed for unemployment. You’d think that would be bad for stock prices… And you’d be wrong. The Dow jumped 6.4% that day. The information was presumably priced in during the prior 3 weeks, and the formal arrival of that news was not surprising. A few weeks later, this hit:

Ultimately, for most people the best strategy is to avoid market timing. It’s a complicated animal, with over $30 Trillion of investor dollars looking for an edge. Over the long run, stocks have averaged around 10% per year, which is incredible compared to virtually everything else. To get your piece of the market’s return though, you’ve got to stay invested and focus on what you can control: