Stay Focussed on Time in Market, Not Market Timing

When markets are in upheaval, you may be tempted to cash out for fear of losing more of your investment. This is not necessarily the move to make. While past performance is not a guarantee of future outcomes, as most investment prospectuses may claim, you should take heart in how markets have reacted in the past.

“There’s no reason to think that markets will not recover, even from a global health crisis like the coronavirus,” explains Richard Cayne of Meyer International in Bangkok Thailand. “As long as you maintain a look forward and don’t let the current situation panic you into doing something rash.”

Market timing is not for the faint-hearted

Buy low. Sell high. That seems like a simple strategy to make heaps of money in the market. But when is “low” low enough to buy? And what about the “high”? Seasoned traders still are looking to master market timing – being able to identify the optimal times to buy then sell. There are so many variables to consider, from trade activity, like investors keen to buy or sell or short a stock, to business performance, like companies seeing booms in sales or employee strike actions, to unforeseen natural events, like droughts or pandemics.

What may seem like a sign to buy for some may be an equal indication of a selling opportunity. As an individual investor, do you have the time, much less the wherewithal, to monitor practically everything? And are you sure you’ll come out a winner every time? Even with illegal inside information, you may lose. Look at Martha Stewart. She sold Imclone stock at around $50 a share before it dropped. But if she held onto the stock, seven years later it was worth around $70. That’s without jail time and hefty fines.

Invest for the long haul and take advantage of time in the market

Holding onto stock through bad times as well as good is considered having time in the market. When the markets are surging, you cherish your holdings. But when things start looking bad, there’s an urge to sell and cut your losses. But are you really cutting your losses? If you look at a historical chart of the S&P500 over the past 90 years, you’ll see peaks and troughs, but they are always trending up. So, stay in for the long haul, maybe even buy during down periods, and maybe you’ll thrive.

S&P 500 Index – 90 Year Historical Chart

Still not certain? This is definitely a good time to call on a trusted financial expert like Richard Cayne, who’s career is based on following markets and investments and who’s success is based on their clients’ success. Get in contact and ask questions about your portfolio and maybe find out about hidden opportunities to bolster your investment strategy.