by Scott Ronalds

We’re often asked where we think the markets are headed in the near term. Our answer: “We have no idea.” This can be an unsatisfying response, but the fact is, nobody knows. And to throw out a guess as to where the markets will be trading by Labour Day, for example, is just careless. All the hype, time, energy and stress that goes into short-term forecasts is indeed wasted.

What we do know is that markets will go up over time. And if you have a mix of stocks and bonds that’s sensible for your situation, and stick to it through the ups and downs, you’ll do just fine. Better than fine, in fact. You’ll be ahead of most investors. This is because we know that the average investor has a tough time sticking to a plan. He buys high and sells low. He doesn’t want to miss the next big thing. And he has a tough time hanging in when things get ugly.

So don’t worry about where the Dow Jones will be by Halloween, Christmas, or Easter. Worry instead about how you’re going to stick to your plan when markets are soaring through new highs or sinking to fresh lows. Because if you plan on investing for any reasonable period of time, you’re going to see both. More than once.

Your own behaviour will be the biggest determinant of your investment success over the long run, not how the market does next week, month or year.