"... but this [making investment decisions based primarily upon current market conditions] is a perfect example of so-called recency, the single biggest mistake that even the most experienced investors make. This referes to our tendency to extrapolate recent trends indefinitely into the future."I've spoken to a number of folks concerned about today's weak stock market and they are considering pulling all of their money out of the market and putting it in something "safe". They are falling victim to recency by thinking that the weak market will extend forever into the future. Most investors, especially those that are not close to retirement, should be doing the exact opposite. They should be putting money IN the market now. To sell now they are buying HIGH and selling LOW - not a way to retire comfortably.
Picture taken by Lori Fisher in Estes Park, CO
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