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MARKET COMMENT
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Carburton Street, London – After closing at 4,433 on September 21st and registering a four-year low, it's been uphill ever since for the FTSE 100. Now standing at 5,317, the UK's leading stock market index has put on 20% in little over seven weeks. Have we passed the market bottom? Is the bear market over? Here's the truth: nobody knows. While many pundits have been giving their views of late, investors can only recognise recoveries with hindsight. In fact, true investors shouldn't spend a minute considering market bottoms. Contributors to an index tracker -- safe in the knowledge that the stock market typically beats all other investments over the long-term -- should continue to make their payments regardless of market movements. Meanwhile, stock pickers will concentrate on individual companies, not the level or direction of the overall market. For stock pickers though, there is a psychological element to the market's rapid ascent. With most shares higher than they were just two months ago, there could be a feeling of having missed the boat. This could lead to portfolio danger on two counts. Firstly, there's the temptation of buying shares only because they're rising. After the dotcom bubble, surely everybody now knows the dangers of this philosophy. Remember the words of Sir Jimmy Goldsmith: "If you see a bandwagon, you're too late". Secondly, on a more pessimistic note, there's the possibility of overlooking certain shares just because they've recorded a sudden surge. Sure, those shares you've had your eye on may have jumped 20% since September. But even at a higher price, they could still be attractively valued. Don't let past share price movements affect today's judgement. In short, whether the talk is of tops, bottoms, recoveries or downturns, the adherence to a sound set of investing guidelines will always insulate stock pickers from wasting time thinking about the market's next move. More: Develop An Investing Strategy | Discover More About Index Trackers