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Should I maintain a consistent strategy in investing?

Once you have decided on the right investment mix to meet your investment objectives and goals, you should try to maintain a consistent strategy. In general, you should only change your strategy if your personal circumstances have changed.

As tempting as it may be to "bail out" if your investments take a dive, financial experts generally suggest that you stay fully invested. If you try to "time the market" you run the risk of getting caught in the trap of "buying high" and "selling low."

If you hold on to your investment, chances are good that its value may eventually go back up, and that it may end up being worth more than when its value dropped.

As illustrated in this chart, John lost money on his investment because he sold it at a loss. Kim, on the other hand, made a gain because she decided to hold out and not panic when the stock market took a tumble.