Insights + Resources

Market Timing and Your Investment Strategy

Jun 29, 2020

stopwatch stock market time
Don’t miss out on the “good days” while trying to avoid a “bad day”

Hindsight is 20/20. It’s only human to imagine what it might have been like to turn left instead of right on some fateful day. However, that sort of daydreaming is unhelpful when investing, especially when it leads you to  try timing the market.

Since the beginning of the COVID-19 outbreak, we’ve seen a great deal of volatility. But, in the two months since March 23rd’s record low, the S&P 500 has risen 33%. While past performance doesn’t guarantee future results, it shows how quickly market sentiment can change. 1,2

I prefer a disciplined approach to investing. I combine a person’s goals, time horizon, and tolerance for risk with my own understanding of the overall economic landscape. It boils down to this: in timing the market to avoid the “bad” day, you risk missing the “good” days, too.

Missing even just a few of those “good days” can really add up.

A national investment firm looked at a $10,000 investment into the S&P 500 for 38 years. By missing only the five best days over that period, the investment grew to $458,476. Meanwhile, if the money remained in the account untouched, it would have grown to $708,143. Past performance is no guarantee of future returns, but this illustration shows the long-term power of “time in the market vs. timing the market.” 3

As your financial professional, I understand that volatility can cause anxiety, and it can be tough to sit still when it’s happening. But as we’ve seen lately, it may sometimes be best to tune out the noise and trust the strategy that’s already established.

I always look forward to answering your questions, so if you have any, please reach out and let’s set up a time to talk. If you’d like, a recent Epic Market Minute video quickly discusses the importance of taking a few shots when you have a chance.

Tags: , , , ,

More Insights

CARES Act: Will There Be a Phase 4?
Jul 10, 2020

With the economy and financial markets flashing mixed signals, it’s no wonder that lawmakers are deadlocked on whether to pass a Phase 4 of the CARES Act.

Market Behavior and the Economy
Jul 8, 2020

As states cautiously begin the process of relaxing their COVID-19 restrictions, some are wondering, “Why is the stock market doing so well when the economy is doing so poorly?” Ever heard of economic indicators?

What Determines Car Insurance Rates?
Jul 6, 2020

Your car insurance premium is based on more than your driving history. The amount you pay for auto insurance is determined by a complicated algorithm that takes many factors into consideration. Your driving history is just one variable used to calculate your rate. Read on to learn more about what auto insurance carriers look at … Continue reading “What Determines Car Insurance Rates?”

An Unprecedented Rush to Cash
Jul 3, 2020

As Americans adjust their spending habits in a rapidly changing economy, they are building cash reserves at an unprecedented rate. The Bureau of Economic Analysis reported on May 29th that the personal savings rate hit a historic 33% in April. To put that into perspective, it’s the highest number since the Bureau started tracking personal … Continue reading “An Unprecedented Rush to Cash”

Fourth of July Optimism
Jul 1, 2020

The Fourth of July holiday will be very different this year. Although it’s a time to enjoy family and friends, and maybe even watch some fireworks, social distancing and a new wave of COVID-19 cases also may take a seat at the picnic table. We all continue to believe our doctors and medical community will … Continue reading “Fourth of July Optimism”

Insights + Resources >