Conquer the Enemy in the Mirror

"Timing the market" is when you're trying to figure it out when to buy or sell. The object of timing the market is to buy low and sell high. Market is a roller coaster ride. It's up and down, turn and twist,...

Most of the investors who had invested in that fund from 1990 to 2010 don't even come close to that 10 percent gain. They put less money or stop contributing and that they would say that this current fund is not doing well, and that they will find another fund that gives a higher percent gain. But the thing they don't realize that a low percentage interest fund is the steady and stable fund. So when it gain, they are trying to put their money in. To sum up, investors and individuals are doing the opposite thing. Investors sell low and buy high!

Mr. Hallam explains the stock market by representing a dog on a leash. In a short run, the dog is going to run all over the place. No one can really predict where the dog going to be next. In the end, the dog can run way ahead or way back behind because of the leash. However, it will move in sync with earnings over the longer term. 
The stock market is exactly like a dog on a leash. If the stick market races at twice the pace of business for a few years, then it has to either wait for the business earnings to catch up, or it will get choke-chained back in hurry. 

Reflect: 
I like how Mr. Hallam tells his story about the falls of the market in 2002 and 2008. Fall is not a bad sign, instead it is a huge opportunity for people who invest their money in funds. It's a huge advantage but most people don't realize and they don't understand how the market works. Basically, after the drop, the market will grow intensely. And that is a good timing for the market, buy low sell high. Like John Bogle mentions in his classic text, Common Sense on Mutual Funds, that investors sell off the stocks instead of buying their opportunity when the market went down. 
I had a talk with my dad. I was telling him that how cool you can get a huge opportunity when the market went down. Most of people seems to flee away from it. My dad doesn't buy stock. I was asking him what will he do when the market fall, will he sell or will he buy. He went with the answer sell. But after i show him Chapter 4 and explained it to him. He was totally surprise about it. And he asked me that what if the market keep dropping?