Market Timing Vs Time In The Market ?
There was an article about the important of “Market Timing vs Time in The Market “ by Mr. Goh Eng Yeow ,Senior Correspondent ,The Straits Times on 20th Aug and you may find the detail as below :
This is a never ending argument or debate on which is more important ie Timing or Time In the Market , and from most of the articles you read, you may find that most of them are more inclined towards “Time in the Market “ rather than Timing the Market.
Articles as below ….
Buy-And-Hold Investing Vs. Market Timing ( From Investopedia )
Time in the Market vs. Timing the Market ( From Monetips.com)
Why Market Timing Never Works ( From Time.com)
What the numbers show us that "time in the market" trumps "timing the market" year in and year out and rather than picking a stock for a short period of time hoping for a pop and quick return.
Well , no doubt that “time in the market” is very important as we could see the impact of “ compounding effect “ in our portfolio in the long run, ie. The world number 8 wonder according to Albert Einstein.
But for me , I would reckon that BOTH ( Time and Timing the Market ) are equally important and do believe that if we could buy at the “right timing “ ( Here, I am not saying the perfect timing and also not about doing market timing on daily/weeks /months or even 1 or 2 years basis) , but by looking at market as a much longer cycles using “regression line “.(click)
Avoid buying during the peak of valuation and at the same time buying more during crisis would give us “extraordinary reward “ hence shorten our time frame to achieve F.I.R.E.
As famously coined by Father of Value Investing : Benjamin Graham , Mr. Market tend to be very emotional and over-react from time to time. We may take these as “opportunities “ to time the market by accumulating more share ( fundamentally strong and value stocks ) during the CRISIS.
I will not repeat what I have written before in “My Investment Strategies “ as below :
Depending on your investment life cycle and stage (and of course your risk tolerance profile ), you may try "time the market" and be more aggressive in adjusting your " Cash : Equity " ratio base on long term market valuation.
Always be ready for crisis to hit and react accordingly…