Now you realize that buy-hold advice doesn't make sense for retired investors. You understand the fallacies behind the myths. You know that:
You know to avoid the buy-hold strategy, but what do you do? You create a plan that allows you to get out of the market at a predetermined point, without making an emotional decision. You create a sell strategy.
As a proponent of sell strategies, I've been called a market timer. I'm not. I'll be the first one to say you can't time the market. Besides the fact that there are too many variables and too much volatility, it's impossible to choose the perfect time to invest based on the market's behavior, so you should not even try. To illustrate my point, let me ask you a question: Would you rather invest when the market was going down, or when the market was going up? I bet you'd say, “I'd rather invest when the market was going up. I want to invest in a market that's rising.” Now let me ask you the same question in a different way: Would you rather invest when the market was down, or when the market was up? Looking at it from that angle, would your answer be different? I suspect it would. In my experience, most people say they want to invest when the market is down, but invest when it is up.
Even if you could time the market, the danger to your investments would outweigh any benefit you might receive. Imagine there were two investors who had each decided to invest $2,000 per year for the past 35 years. Investor Number One invested in the S&P 500 Index once a year on the market's highest day each year. Investor Number Two bought at the market's lowest point each year. Which fictional investor do you think earned more money over the past 35 years? If you said Investor Number Two, you're right. The guy who invested at the lowest point each year would have ended up with more money. But guess what? That guy, Investor Number Two, would have had $519,000. Investor Number One, who invested at the market's highest point each year would end up with $498,000. That's a difference of just $21,000 over 35 years. That's nothing. There's no reason to try to pick the top or the bottom of the market each year to do that, especially when you may risk staying in a bad market to do so.
You can't sit on a beach and guess when each wave is going to crest. You can't predict the movement of every single wave. But you can tell whether the tide is receding or coming in. I believe you can do the same with the market. You can't time the “waves,” but you can see the trends. When the 2008 market was dropping like a stone, did you think the tide was receding? Did you feel it in your gut? Absolutely you did. Your intuition can help you by alerting you to danger. But you should never make an investment decision based on intuition or emotion. You have to rely on quantifiable fact.