Does Market Timing Work?

Many investors are wondering what to do with their investments. Although many have a prudent portfolio, globally diversified with the right amount of risk for them. Over the long term they will succeed. However, during short term volatile environments these portfolios may underperform.

Many investors seem to believe that there is someone out there able to correctly time the market. That is, get out at the right times and get in at the right times. Unfortunately, that someone does not exist. At least not consistently.

Below is a link to an article providing proof that market timing does not beat dollar cost averaging. Even if the market timer got it perfectly right each and every time. Which is we all know impossible to consistently do.

https://www.marketwatch.com/story/this-is-the-last-article-youll-ever-need-to-read-on-market-timing-analyst-claims-2019-02-06?link=sfmw_fb&fbclid=IwAR1Fqhgqix6y2EL0pDgb7VF0aKrUPmgAdAMdb9B85UObEJh6nfYFyu2NVYU

(Hope the link works)

We must all decide if we want to be investors for the long term or gamblers for the short term.

If your goal is a secure retirement. I recommend deciding to be an investor with a long-term focus. You could be successful by being a gambler. However, your risks are extremely high that you will not succeed.

To succeed long term you must own equities with the correct amount of high quality short term fixed income…globally diversify…rebalance.

In most cases this will require retaining the assistance of an investor coach/fiduciary adviser.

Leave a Reply

Your email address will not be published.