Timing the market vs time in market

Timing the market vs time in market

July 6, 2022

Timing the market is an old myth that many investors talk about. if you're confused on how it works and if it actually pays off. Don't worry. We've broken it down into 3 scenarios in this video.

Video transcript

Should I try to time the market when I invest?

Here’s three different strategies that will help you answer that question.

Lucy, Marcus and Nadia’s mum save £50 a month for them from the day they were born.

Lucy’s mum tried timing the market, but she got her timing horribly wrong.

She moved her savings to investments at the top of the market just before the two biggest crashes since 2004. She still made her money grow, though, and the £10,800 that she invested grew to £14,900 by the time Lucy was 18.

Marcus’ mum fancies herself as a bit of Warren Buffet. She got her timing spot on, though, and she moved her savings to investments the month after the two biggest crashes since 2004.
So when Marcus was 18, he had £23,600. Impressive.

Nadia’s mum didn’t believe in timing the market, though she stayed invested throughout the whole period and didn’t have to worry about getting her timing right when she moved from savings to investments.
So, on top of spending more time with Nadia rather than just watching the markets. She also managed to make her savings group to £24,500.

Even though Marcus’ mum got the timing spot on, he still ended up with less money than Nadia did because by trying to time the market, there was so much time that he wasn’t invested in the first place.

So remember, it’s time in the market that counts, not timing the market.

Money at risk when investing. Remember the value of your investments can go up as well as down and past performance is never a guarantee of future performance.

Nosso does not give financial advice and the numbers used are to provide a helpful illustration.