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1 Stock Market Myth We Should Ignore

I came across an amusing passage earlier today that was written by Professor Aswath Damodaran.

Damodaran hails from New York University’s Stern School of Business and is a well-respected voice in the world of finance and investing on subjects like valuation, corporate finance, and investment management.

But despite his credentials, some have found reasons to doubt his abilities. In Damodaran’s aforementioned passage, which is reproduced below, he mused that his popularity rises when the stock market goes through a crisis:

“I find myself getting more popular during these periods, as acquaintances, friends and relatives that I have not heard from in years seem to find me. They are invariably disappointed by my inability to forecast the future and my unwillingness to tell them what to do next, and I am sure that I move several notches down the Guru scale as a consequence, a development that I welcome.”

In my experience given my day job with the Motley Fool Singapore, it is not uncommon to be asked whether it is the “right time to enter the stock market.” And in volatile times like these – Singapore’s market barometer, the Straits Times Index (SGX: ^STI), closed yesterday at a level 18.5% lower than its 52-week high that was reached in mid-April – more of such questions do flow in.

Implicitly, the questions suggest that good investors should know when to “get in” and “get out” of the stock market. And, that’s the titular myth about investing that we should ignore.

Thing is, as Damodaran suggests – no one really knows the future, especially over the short-term. Here’s the good news: One can still invest well over the long-term without having to make – and subsequently get wrong – short-term guesses over the stock market’s movement.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.