Market Timing — Out To Getcha?

Stock MarketWho wouldn’t want to buy stocks when they’re cheap and sell them when their prices peak! But, if it were that easy, everyone would get in on the act.

The truth is, timing the buying and selling of investments to coincide with market highs and lows is difficult — if not impossible — to pull off. Even experts have a hard time accurately and consistently forecasting market movements. Trying to guess what the market will do can leave you with lower returns than following a simple buy-and-hold strategy.

Easy After the Fact

Recognizing market peaks and valleys is simple once they’re over with. But highs and lows are a lot harder to determine while they are happening. You might think a stock is poised for a meteoric rise, only to watch it crash and burn in a market slide soon after you buy it. Or you might sell a tanking “loser” — and then watch it rebound soon after.

Bad Timing Can Cost You

Time and again, the stock market’s significant gains occur over a relatively short period of time. If you’re taking a break from stock investing when stock values start to climb, you could miss out on the market’s best days. And that could really hurt your portfolio’s long- term growth.

A Better Path To Follow

Following a long-term investment strategy that’s designed to help you weather the market’s ups and downs may serve you better than trying to time the market. By all means, sell an investment that isn’t performing the way you hoped it would. But first give it time to live up to its potential.

Growth of $10,000

20 Years
(1991-2010)
15 Years
(1996-2010)
10 Years
(2001-2010)
Stayed in the Stock Market $57,510 $26,718 $11,506
Missed the Month with the Best Return Each Year $16,240 $9,864 $6,227

This is a hypothetical investment that performed similarly to the S&P 500 Index, an index of 500 large-cap stocks. Past performance does not guarantee future results. You cannot invest directly in an index. Your investment returns will be different.

Source: NPI

Content written by Newkirk®, as distributed to Symmetry Partners, LLC. Our firm utilizes Symmetry Partners, LLC for investment management services. Symmetry Partners, LLC, is an investment adviser registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered, or excluded or exempted from registration requirements. All data is from sources believed to be reliable, but cannot be guaranteed or warranted.

Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Symmetry Partners LLC), or any non-investment related content, made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. The article contains the opinions of the author(s) but  not necessarily Symmetry Partners, LLC.  Please note that you should not assume that any discussion or information contained in this article serves as the receipt of, or as a substitute for, personalized investment advice from Symmetry Partners or your advisor.

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