Trying To Time The Market

Nobody can time the market. It makes no sense to wait for falls and then invest in.

You might get lucky once or twice, but you won’t “win” over a life time doing it that way.

Look at the last fifteen years or so. So many people didn’t want to invest:

• Before 2007–2008
• In 2009 despite markets being so low (it is better to wait and see)
• 2012 - markets have been doing well. Better to play it safe.
• 2013 - markets have been doing well for years now. Are they too high
• 2014 - same as 2013
• 2015 - even more worries now about markets being too high
• 2016 - markets have been too high for years and Trump might get elected!
• 2017 - markets have been too high now
• 2018 - markets have been too high, for too long now
• 2019 - start of the year. Markets have finally fallen. Still, best to wait and see
• Start of 2020. Markets have been high for too many years now and we have this Covid business
• November 2020. Best to wait after the election and markets have recovered too fast from Covid
• 2021 - Markets have been too high for too long now!

See the pattern? The same people worried about Trump getting elected in 2016, were worried about the 2020 election.

The same people worried about Covid, were also concerned about 2008. All time, the patient buy and hold investor beat them all.

If I would have gone back to the 1970s, 1980s and 1990s you would have seen a similar trend.

People always worry about this event or that, this crash or that, and all the while markets march higher, especially adjusted for dividends.

As a final point, it isn’t true that markets are at records globally. At least in capital value terms (not including dividends), the FTSE 100 and many emerging markets are below all time peaks.

In fact, Mainland European, UK and Emerging Market stocks are incredible cheap compared to US stocks on a CAPE and P/E ratio despite 0% interest rates and QE.

That doesn’t mean they will beat US stocks for sure, but remember, on a global basis, stocks look cheap.

As Buffett said recently as well, even US Stocks look quite cheap IF interest rates stay low for long.