Trevor Stasik - About Me

Friday, December 28, 2007

Predicting a Bottom?


Feel like gambling? Feel like placing a bet?

I couldn't believe it, but I thought that I heard somebody on CNBC predicting a bottom to both the housing crisis and the credit crisis. Perhaps I heard him wrong, but at any rate, it brings up a good point of discussion. Should you ever predict, and thus place your investments, based on where you think the bottom of the market is? It stands to reason that if you could accurately predict the bottom, then the market would have nowhere to go but up.

There have been a number of people that have predicted bottoms before, most of them have been wrong and the ones that were right were probably just lucky. It is far wiser to invest based on fundamentals or even technical market data than to try and guess where a certain stock, industry, or market stops its downward slide. My recommendation is that if you have assets to invest, use some hard data to make an educated investment rather than spinning the roulette wheel hoping you called the bottom correctly. Don't play games with your money.

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