Investing articles can be long and boring. How about I read the article and provide you with the important information for DIY investing success.
Here it is.
Trying to time the market means trying to pick a time to buy your stocks, bond or etfs. Typically investors want to buy stocks or etfs when the market has gone down thinking they are getting a bargain. So instead of buying when they have cash available, they sit and hold their cash waiting for that opportunity to buy low.
Does this strategy work? No, unless you are a super investor like Warren Buffett and trust me, you and me are not Warren Buffett.
Furthermore, this article in the Globe and Mail shows that even if you are good at timing the market, the benefits of doing so are modest and therefore not worth the risk. And the risk is huge, namely missing out on stock market rallies because you’re waiting for a better deal.
Here are some key points: Note: Lucky means fantastic timing where you buy when the market is down and then starts to rise quickly afterwards (good luck getting that right every time). Unlucky means buying at the yearly market high and then watching your investments go down shortly afterwards.
I’m a department head for a high school in Toronto. I graduated from the Ivey School of Business at Western University and have been a DIY investor for over 20 years.