The stock market is in the late stages of an economic cycle nearly in its ninth year, but Larry Fink, CEO of world’s largest asset management firm, BlackRock Inc., says investors ought to forgo attempts to time the market. They should just stay invested.
‘I’ve been consistent on this show saying that you should be 100% in equities, you should always be invested in the marketplace.’
Fink has been an advocate of long-term investing. He told CNBC in a morning interview that new tax cuts championed by President Donald Trump, which helped propel the Dow Jones Industrial Average DJIA, -0.87% and the S&P 500 index SPX, -0.61% to repeated records in 2017 and the first month of 2018, have extended the current economic expansion into “extra innings.” But he cautioned against market timing to determine when equity benchmarks might ultimately slip into a bear market, meaning fall at least 20% from a recent peak. The S&P 500 and the Dow already are in a correction phase, usually characterized as a decline of at least 10% from a high.
The BlackRock BLK, -2.09% CEO explained in greater detail below:
|But I think we spend too much time talking about market timing. And our big thrust is focusing on being in the market, all the time, because most of us are not good enough at market timing. For those who have been in the market, stayed in the market after the 2008 crash into 2009, really benefited. And those who ran way really were quite harmed by that action. And so, at the time when you had the greatest fear that was probably the time to buy the most. So, the key for investors is staying in the market.|
The Wall Street luminary’s comments come as his asset management giant pulled in nearly $57 billion in new investor cash in the first three months of the year.
Check out the CNBC clip below: