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Buying high, selling low
You rush into stocks when the market is soaring - and bail after a 300-point drop in the Dow.

Why: Like everyone else, you tend to project recent events into the future. These days, that doesn't feel good.

The fix: If you have a portfolio of funds, pick one day a year to check on your allocation. And then rebalance, which forces you to sell high and buy low. Hold the line the other 364 days. Or buy a target-date retirement fund - the manager picks a stock and bond mix based on your age, not recent performance. The Vanguard 2025 Fund (VTTVX), for example, has 79% of its assets in stocks.



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Last updated July 24 2008: 10:17 AM ET
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