Stocks and Shares ISA: Timing the Coronavirus Pandemic?

keyboardworrier

Nobody knows anything, we only think we know. I'm just investing as I normally would and will let time do its thing. Here's a couple of good articles showing why market timing generally doesn't work:

https://www.macleans.ca/economy/money-economy/investing-coronavirus-fear-rrsp-2020/

This one shows the stock market with various health related scares highlighted (Ebola, swine flu etc) on the graph

https://www.ifa.com/articles/market-timing_more_evidence_really_doesnt_work/

Of course, this time it really could be different...

Edit:

This is also worth reading,

Meet Bob. Bob is the world’s worst market timer.

https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

dunstonh

Twointhebush said:

So essentially even with the markets down as they are, it would still be a gamble to invest a single (large-ish) sum today? 

Investing is not gambling.   There is no gamble with investing today any more than there was 2 months ago.    When you are invest, you are typically looking at a term of 10 years plus.   If you happen to miss the bottom by say 10% now, then that will pale into insignificance over the period you are investing.

There will be more drops in excess of 20% in that period too.   So, you either suck it up and accept it or stick to your savings accounts and you real term losses (after inflation).

BananaRepublic

Dunstunh has said it well. We simply cannot know what will happen tomorrow, next week or next year never mind in five years time. All we can do is go by historical precedent, and take steps to reduce risk. That means diversifying investments and taking the long view. In that context now is a very good time to invest compared to three months ago. Were people asking if it was a good time to invest three months ago? In general no, which is a bit odd when you think about it. 

Thrugelmir

BananaRepublic said:

Dunstunh has said it well. We simply cannot know what will happen tomorrow, next week or next year never mind in five years time. All we can do is go by historical precedent, and take steps to reduce risk. That means diversifying investments and taking the long view. In that context now is a very good time to invest compared to three months ago. Were people asking if it was a good time to invest three months ago? In general no, which is a bit odd when you think about it. 

Three months ago valuations of some companies were extremely stretched. As the mist lifts on this crisis valuations may still remain stretched. Taking the nearest historical precedent. Recovery took a very very long time.