Timing the market--can be a person's enemy

Timing is everything in life, or so the saying goes. But when it comes to investing, timing--or attempting to time the market--can be a person's enemy. No one likes to be left out of a good thing, so when we hear of a hot stock or mutual fund, we want a piece of the action. But usually by the time we've heard about it, it's too late, and the gains that made the investment so attractive in hindsight lead us into an investment that underperforms once we get on board.

Two common themes that emerge are investors pile into funds with excellent track records that are unable to repeat those strong performances, and investors abandon funds after sharp downturns and thus missing out on the subsequent rebound.

Extracted from Adam Zoll, Morningstar

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