Before you answer that question, you should consider whether it is possible to reliably time the market. That, of course, is every investor’s dream — avoid all market losses while participating in all market gains. Unfortunately, it’s a difficult strategy to implement for a couple of reasons:

• No one has been able to consistently predict where the stock market is headed. Many try, but so many factors affect the market that even professionals watching the market full time find it difficult to time the market with any degree of accuracy. In retrospect, everything seems crystal clear. Were you able to get out of technology stocks before their significant decline in 2000? While we now know that was the market top for technology stocks, very few recognized that fact in 2000. Also, significant market gains can occur in a matter of days, making it risky to be out of the market for any length of time.

• Frequent trading seems to reduce, rather than increase, returns. Several studies of investor trading have found that investors who trade more frequently generally have lower portfolio returns than those who trade less frequently. Investors tend to buy hot sectors and sell underperforming investments — the opposite of a buy-low-and-sell-high strategy. In essence, they are chasing yesterday’s winners rather than tomorrow’s winners. Also, trading results in a taxable event. Even with capital gains tax rates at 15% and the highest ordinary income tax rate at 35%, taxes may significantly reduce your portfolio’s return.

Rather than trying to time the market, devise an asset allocation strategy that you will be comfortable with for years, and then purchase investments compatible with that strategy. That doesn’t mean you’ll never sell an investment, but selling should be an infrequent part of your investment strategy.