There are many impossibilities in life.
And I’m sure you’ve heard of some of them – to live forever, to travel at the speed of light, or even to travel back in time. But one of the lesser known impossibilities is the belief that someone is able to consistently Time the Markets. And anyone telling you they know exactly when something is going to happen in those same markets is quite simply not telling you the truth.
If only it were possible.
Imagine being able to predict what the market was going to do at some point in time. To know exactly when it was going up, or down, or when it was time to get in or out. You’d be very wealthy and also very famous. But its not reality, despite many people acting like or believing that they can.
Market commentators and forecasters are always sprouting off on what the market is about to do. ‘Sell now, before it’s too late’. ‘Buy the dip.’. ‘A Market Crash is Imminent’. ‘Rotate into Cyclicals’. The unfortunate thing is that very few people have shown an ability to successfully navigate the ups and downs of the stock market, including the world’s best investors.
“There are only two types of people: those who can’t market time, and those who don’t know they can’t market time.” Terry Smith
Timing the Market is a very tricky thing to do. Despite knowing this, the most basic rules of investing almost suggest that we should be able to. Buy Low, Sell High – that is the simplest recipe for success in the stock market. When the market appears braced for a fall, move to the sidelines. After the decline, buy back those stocks cheaper.
If only it was that simple.
The good news is that the Investment Masters long term track records of success, stand in spite of this. You don’t have to be able to time the market, and in fact, Timing the market isn’t a pre-requisite to success at all.
Here’s what some of the world’s greatest investors had to say about market timing: “I can’t time stocks.. I don’t know anybody else who can either.” Warren Buffett