Life without a crystal ball.

/, Investing, Investing, Investment, Uncategorized/Life without a crystal ball.

Markets go up. Markets go down. And so it continues.

If only we could predict with absolute precision and certainty, when market upturns and downturns would take place.

But of course that’s impossible.

Without a crystal ball at your disposal, trying to ‘time the market’ to capitalise on the best days and avoid the worst is more likely to set you back.

Research by Vanguard – an investment management company with $1.6 trillion in assets – shows that the market’s best and worst days tend to happen close together.

Vanguard looked at the 20 best days and 20 worst days from 1990 to 2015, and found that in all but one instance, the market’s worst days were within a month of the an extreme ‘up’ day.

[Read full article.]

The key, we believe, is to stay the course with your longer term strategy by staying invested. That way, you get to share in the inevitable upswings that take place. You also avoid crystallising a loss that would occur if you sold when the market had fallen.

Trying to time the market is like constantly hopping between queues to get to the front fastest, much like this little guy in the video…

As the Vanguard research concludes, “Down days are going to happen; the key for all of us as investors is to stay the course, rather than make sudden changes based on macroeconomic events. As we witnessed recently with Brexit and the immediate (but quickly reversed) stock sell-off, we must instill in clients that the activities of short-term investors make the headlines but what clients should really be concerned about is long-term wealth creation.”

If you would like to know more about the value of creating and sticking with a customised investment strategy, we’d love to help.

Contact us for more information or to schedule a complimentary appointment.

 

Source: “When the worst of times is the best of times” by Chris Tidmore, 28.9.16, http://vanguardadvisorsblog.com/2016/09/28/when-the-worst-of-times-is-the-best-of-times/

 

2018-01-22T08:14:25+00:00 September 30th, 2016|