Time in the Market is Better Than Trying to Time the Market

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April 16, 2020

The world is now in lockdown due to the virus, COVID-19. It's sent markets into a meltdown, and panic has set in when it comes to global trading, but the world will recover and so will stocks. To offset jittery share indexes, we take a look at the goal of long term investment as opposed to short "quick wins". 

We have all heard the saying "It's not timing the market its time in the market." Most experienced traders and advisors would wholeheartedly agree with this. Traders and "experts" that promise otherwise are most likely to have an alternative agenda. They’ll have a history of never picking the right stock to earn you a valid return on trying to time the market, but you wont get to hear about that one conveniently.

From real estate investing, to regular stocks and shares, or even retirement planning services. If you are interested in placing a portion of your portfolio into the market, speak to one of our qualified and trusted advisors today: 

Let's break down why patience and careful planning will reap better rewards in the long run. Due to the COVID-19 outbreak, the market is incredibly volatile, and stocks are plummeting everywhere we look. Some may never recover while others taking massive hits will, over time, climb back to stable heights. Many of our customers are asking about oil prices, and this is something that will recover. Along with oil stocks, there are plenty of opportunities to grab. 

When to buy stock?

There has never been a better time to buy a stock than now. This is expected to be the biggest crash of the decade, and it can work well in your favour for the long term. We face a time when the markets are on the floor. The knife will keep falling, but for our more risk-averse and new clients, now is an excellent time to purchase shares for future returns. Especially those looking to start retirement plans.

When to sell your stock? 

Some of you may well be worried about the volatility of the market and future global uncertainty. People are buying and selling at alarming rates, while others are just offloading and filling the market with cheap stock. Breathe. Warren buffet is thought of as the world's best investor with over £240 billion under management at his company Berkshire Hathaway. His viewpoint on the length of time you hold a stock is "forever." He explains that you should invest and sit tight, never check your portfolio day to day or even hour to hour. 

In it for the long run? 

Let's say you have bought stock and its price decreases rapidly unless you day trade or are in it for the short term, do not sell based on emotion or without doing your research! If you are looking to secure funds for future generations and plans, then look at companies that don't just have cheap stock. Look for companies that have a good story to tell and stable longevity. We hear stories that people turned stock down in companies like Uber and Apple at the start of the company's life and what the stock price would be today. These stocks still, continue to climb because we feel these companies will continue to impress and amaze people with their growth and story and therefore, provide confidence in their share price for a long time to come. 

Buying and selling in a crisis

Let's look at the risks of rapid buying and selling in volatile markets. One of the critical aspects of trying to time the market is making many transactions, buying and selling rapidly to maximise profits.

Commission Fees 

A considerable factor people forget when investing this way is the fees involved with administration and broker fees you will incur from the transactions. 

Human error 

Like we explained above, your broker may miss the timing of when to buy and sell given this unprecedented time, leaving you high and dry with your time and money in the drain. 

Unpredictable markets

There is much information online regarding the market, supposed experts and experienced tipsters giving away secrets and advice for a small price. These so called experts wouldn’t need to be selling anything, more often than not they are capitalising on your naivety.

In a time like this, no one on earth (unless they are inside trading) can tell you what the quick wins are. This is why we, as a company, look to the future of stocks and shares and try to understand market trends for the long run, not the next five minutes. We have advised our current clients to sit on the stock they have and be patient while offering a longer-term plan for new investors. 

If you are new to the investment industry and want to get involved, we say to all our current, and new customers only invest now what you can afford to lose. Even then, we always recommend longer-term strategies that allow for education investment for your family for example or clever wealth management to improve taxation. These are indeed strange, but opportunistic times we are living. 

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