Timing the market

[Deleted User]

Look at the world, the news and what's going on.  What is driving people and governments?  What dangers are there?

COP26 should be opening your eyes as to where investments should be going.  Invest in the future for cleaner water, less waste and reduced pollution.  Many of those type of investments have risen quite a bit since COP26 (e.g. Jupiter Green Inv Trust).  I bought in to them in well in advance of COP26 and in return I hope for a fair return and as importantly a better environment.

westv

I thought everybody knew the next major crash is due around 2028/29. 

JohnWinder

I know time in the market is more important than timing the market,

If I invest today, for the next 25 years, and you invest in six months time when there's been a 15% in preparation for selling in 24.5 years, I'll have been in the market longer, but you will likely have done much better. So I think we have to take that aphorism about compounding returns with some caution.

Secondly, you'd be unlikely to get better returns by trying to time the market, but you could 100% successfully reduce your risk by timing the market now, so just be a bit careful with that 'you can't time the market' aphorism too.

coastline

Thrugelmir said:

Secret2ndAccount said:

Bull markets don't die of old age, and crashes never arrive on time.

To quote Sir John Templeton.

"Bull markets are born on pessimism, grown on scepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell".

So he'd be selling today or not ?  Nobody knows until after the event although it's not a bad idea to fill your boots after a crash that's if you have the spare cash.

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[Deleted User]

JohnWinder said:

I know time in the market is more important than timing the market,

Secondly, you'd be unlikely to get better returns by trying to time the market, but you could 100% successfully reduce your risk by timing the market now, so just be a bit careful with that 'you can't time the market' aphorism too.

Really?   He has investment horizon of 5 years and plans to invest over 18 months.  Does not sound like risk reduction. 

waveydavey48

Is it impossible to time the market? Wiser heads than mine say yes but I said on the forum when the Covid crisis struck and markets were way down that as soon as the new tax year started I would whack my ISA allowance into VLS60. I did so, buying at £180.94. The price has risen steadily and today is £236.66. Doubtless it could crash tomorrow of course.

We invest on the basis that the market will increase in the long term so it seems to me that if there is a sudden drop the chances are that buying at that point is wise, provided you are in for the long haul.   

Linton

waveydavey48 said:

Is it impossible to time the market? Wiser heads than mine say yes but I said on the forum when the Covid crisis struck and markets were way down that as soon as the new tax year started I would whack my ISA allowance into VLS60. I did so, buying at £180.94. The price has risen steadily and today is £236.66. Doubtless it could crash tomorrow of course.

We invest on the basis that the market will increase in the long term so it seems to me that if there is a sudden drop the chances are that buying at that point is wise, provided you are in for the long haul.   

In general buying after a drop implies you chose not to buy earlier.  So it is perfectly possible that dropped price is higher than you could have paid when you first had the money available.

It is perfectly possible to time the market.  The problem is getting it right sufficiently often to compensate for the times when you get it wrong.

Thrugelmir

coastline said:

Thrugelmir said:

Secret2ndAccount said:

Bull markets don't die of old age, and crashes never arrive on time.

To quote Sir John Templeton.

"Bull markets are born on pessimism, grown on scepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell".

So he'd be selling today or not ?  Nobody knows until after the event although it's not a bad idea to fill your boots after a crash that's if you have the spare cash.

Stick around long enough as an investor and you'll witness the cycles first hand.  Much depends of your personal time horizon as to you position your portfolio and your choice of investments. When corrections occur calling the bottom is no easy task. Most likely you'd miss it. 

coastline

Thrugelmir said:

coastline said:

Thrugelmir said:

Secret2ndAccount said:

Bull markets don't die of old age, and crashes never arrive on time.

To quote Sir John Templeton.

"Bull markets are born on pessimism, grown on scepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell".

So he'd be selling today or not ?  Nobody knows until after the event although it's not a bad idea to fill your boots after a crash that's if you have the spare cash.

Stick around long enough as an investor and you'll witness the cycles first hand.  Much depends of your personal time horizon as to you position your portfolio and your choice of investments. When corrections occur calling the bottom is no easy task. Most likely you'd miss it. 

I'm in my 4th decade of investing and I know what can happen. What was he saying ? When was he calling these tops and bottoms.? Any links ? I'm in and out of the markets but that's my preference. I don't know what will happen next .

JohnWinder

Deleted_User said:

JohnWinder said:

I know time in the market is more important than timing the market,

Secondly, you'd be unlikely to get better returns by trying to time the market, but you could 100% successfully reduce your risk by timing the market now, so just be a bit careful with that 'you can't time the market' aphorism too.

Really?   He has investment horizon of 5 years and plans to invest over 18 months.  Does not sound like risk reduction. 

Quite right. My original wording was sloppy, as I was generalising rather than commenting on an 18 month pound cost averaging approach or whatever was suggested. I meant to propose that choosing to be out of the market (with some or all of ones assets, and for a longer or shorter time) based on an attempt to time the market, would expose you to less risk than being in the market. It's not a profound insight, but it cuts across the 'can't time the market' idea, and might give comfort to someone who feels their situation is too risky, could reasonably reduce that risk by deciding 'this is the time to get out of the market', but now must deal with the widely held view that 'you can't time the market'.