When stock prices surge during what feels like an unusually uncertain environment, it’s tempting to proclaim the market is peaking and then bail out. Unfortunately, trading like this can be a money-losing exercise. There are two reasons why it’s a mistake to trade on what you believe is a market top: 1) It’s incredibly difficult to accurately time the top. Just last week, Jon Boorman of Broadsword Capital tweeted a chart of at least 20 times since 2010 pundits have incorrectly predicted imminent doom for the markets. 2) Some of the best gains to be had in the market occur during the months before the market tops.
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