Market Timing Vs Time In The Market ?
There was an
article about the importance 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.
 |
| image credit to theinvestmentmania.com |
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 the market as a much longer cycle using “regression line “.(click)
Avoid buying
during the peak of valuation and at the same time buying more during the 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.
 |
| image credit to sina.com.cn |
I will not
repeat what I have written before in “My Investment Strategies “ as below :
My
Investment Strategy : 3 Ts 3 Ms ( part 1 ) (click
)
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 a crisis to hit and react accordingly…
Cheers !!
Quote Of The Day :
Time the market and then spent time in market relaxing and collecting doses of panadol to ease heartache. When we look back; time flies and then no more heartache anymore. Life in the market is fine again and wondering how we did it right. Timing market or time in the market?
ReplyDeleteHi Uncle CW8888,
DeleteYah,,,you are right , in the long run,,,time in market or timing the market became blur,,,when we stayed longer in the market,,, the panadol must be strong enough to heal the panic during crisis,,, :-)
Cheers !!