Market Timing Photo by Markus Spiske

A Note on Market Timing

Tony Edwards Perspective

After watching the stock market for over 50 years, I can say with absolute conviction that it cannot be timed. If you think it’s too high it will surely go higher, and declines come swiftly and unexpectedly.

An investor who stayed 100% invested in stocks for the last 20 years very likely outperformed someone who dodged the bursting of the tech bubble from 2000-2002 and the financial crisis of 2008. Ask me for the evidence it is compelling. Consider this recent article by the Globe and Mail.

Anyone who says they can successfully judge the best time to buy or sell the market may not be acting in your best interest and may be disregarding very well documented findings on the nature of investing in stocks. Legendary investor Warren Buffet says timing the market is a mistake.

Legions of financial advisors and investment managers who may otherwise be fine, honest people, are making a living by pronouncing when it is a good time to buy or sell. These professionals do their clients a disservice, often in an effort to demonstrate superior skills that are unfortunately lacking.

I myself am guilty of this behaviour by taking an overly cautious approach to putting both my own and my clients’ money to work. We would all have been better off getting our dollars in at the very first opportunity (at least those assets designated as longer-term savings) and keeping them invested through thick and thin.

Historically, holding cash has been a losing proposition by miles. Yes, we should have cash or guaranteed investments to meet any expenses or emergencies that may arise within the next few years. But owning equities, reinvesting dividends and thinking like a business owner, not a stock flipper or market timer, is the fastest way to accumulate wealth.

Investing should be boring. You can safely ignore any and all prognosticators. Think instead of where you feel the world is going in the next 20+ years, review your strategic financial plan as life unfolds, shut out all the noise and invest accordingly.

– Anthony Edwards

Disclaimer

The comments and opinions expressed herein reflect the personal views of Joss Biggins & Anthony Edwards. They may differ from the opinions of Leede Jones Gable Inc. and should not be considered representative of the research beliefs, opinions or recommendations of Leede Jones Gable Inc.

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