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Stock Market Bottom-Fishers Are Trawling Risky Waters

The S&P 500 is down 10% this year, but there’s no way to know if this is a good time to buy.

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Photo: Alamy

With U.S. stock market indexes taking some nasty dips recently and the S&P 500 down about 10% for the year even after a May 4 rally, it’s open season for one of the most popular—and most dangerous—sports on Wall Street: bottom-fishing.

As the phrase implies, bottom fishing entails trying to spot the low point of a market selloff to make some big stock purchases and reap outsize rewards from a quick rebound. It should be stated up front, and in boldface type, how risky it is to attempt to time the market like this. It’s a matter of luck as well as skill, so even those who get it right find it hard to repeat their success. Anyone who listens to sober-minded financial advisers will know to avoid big moves in and out and be content knowing that as a regular saver trickling cash into investment or retirement accounts slowly, week by week or month by month, you’re probably already doing a little bottom-fishing, anyway.