Time In The Market v Timing The Market

Published / Last Updated on 06/03/2019

Time In The Market v Timing The Market - Many say that waiting for the perfect moment to invest is one of the costliest mistakes an investor can make as history shows that it’s time in the market rather than timing the market that gives the best opportunity to reach your long-term goals ....

...... SO SAID EVERY FUND MANAGER WHO WANTS YOU TO INVEST RIGHT NOW AND NOT DELAY INVESTING IN TIMES OF TURMOIL (ALSO, SO THAT THEY CAN CHARGE YOU)

FTSE 100 HISTORY:

  • 30/12/1999 = 6,950 Dotcom Bubble
  • 03/03/2008 = 3,497 Credit Crunch
  • 24/02/2015 = 6,958 Greek Crisis Resolved
  • 28/06/2016 = 5,499 Brexit
  • 09/02/2018 = 7,092 Nth Korea Tension
  • 22/05/2018 = 7,903 Weak £ Drives FTSE Up
  • 06/12/2018 = 6,701 US/China talking, £ Stronger

If you had invested in December 1999 and "spent time in the market" in 2008 you were down heavily, in 2015 you were about back where you were - about break even (after 15 years!).

If you had invested in May 2018, you would be down -15% in December 2018.

WE MAINTAIN THAT YOU CANNOT CALL THE MARKET BUT SPENDING TIME IN THE MARKET (LONG TERM) and NOT TAKING ADVANTAGE OF PEAKS/TROUGHS IS JUST AS BIGGER RISK, IF NOT BIGGER THAN TRYING TO TIME THE MARKET

  • BUY LOW and hold for a long time for value (Timing the Market and then Time in the Market)

or

  • BUY LOW, SELL HIGH and in the next cycle BUY LOW/SELL HIGH AGAIN to profit take regularly and lock in gains - after all who wants to be invested for 15 years + and only break even 1999 to 2015?  (Timing the Market)


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