Volatile Market: Just ignore it; don't try to time it

Many of my BloggingStocks colleagues are writing pieces on Stocks for a Volatile Market. I like some of the picks, but at the risk of offending whomever came up with the idea for this series, I don't think it makes any sense. Many, probably even most, of the pundits will disagree with me here, but I don't think we should do anything different as investors because the market has been volatile.

The idea of this exercise amounts to personification of markets which, while tempting and common, is a mistake. The notion picking stocks for a volatile market would make sense if markets were like weather: When there's a storm, hunker down, bolt the doors, and sit by the fire and drink hot chocolate. And the same applies to investing, or so the thinking goes. There's just one problem: the stock market is a discounting mechanism arguably prone to wild gyrations disconnected from investment fundamentals. It's not the weather. The idea that a person should own certain stocks and sell other stocks because the market has been volatile -- down 7% from its all-time high not too long ago -- just strikes me as inane.

So what should investors do in light of the volatility? I believe that it's foolish to try to time the markets and, if you have a long-term investment horizon, continue to invest in low-cost index funds. History has shown that this is the best thing most people can do with their money.