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I was moved to write this piece after coming across a number of the “standard investing “ flyers that we have produced in this report a number of times in the past – I have included a couple below (sourced from Colonial First State).
These flyers never get old and simply reinforce my belief in the old investment adage;
It is TIME IN the market not TIMING OF the market that will bring success in share investing
So you think of your self as a bit of a share market trader ?
You reckon you have what it takes to make the right short term market calls to get the best result from the market?
You fancy yourself to get out before the big falls and to buy in just at the right time to maximise profits before share price take off?
Well good luck to you – and it is very likely down to only luck that you may do well for a time but not long term
Page 25 – Australian and Global Share markets
Timing the market is a very imprecise skill that alludes most people – in my experience after 19 years at Hudson – vastly most people.
The short term fluctuations of the share market turn on so many variables that it is just so hard to get it right every time.
The inputs to the cause of market movements are vast ;
We have economic inputs from interest rates to unemployment to consumer confidence to exchange rate movements. These inputs occur not just here but in every country on the planet and they are all interacting in a globalised world.
We have geopolitical events that include political upheavals, trade skirmishes and real wars.
We have natural events from cyclones to earthquakes to tsunami that are, by there very nature, unpredictable.
We have company specific events ranging from product success or failure, management turmoil, product innovation that can be both a positive or a negative depending on which side of innovation your are on.
And then at is most basic level we have human emotion. We have the fear and greed that drive all markets but share markets in particular as individual investors are all individuals with there own prejudices and experience, fears and desires. These traits impact on markets at a macro level and on you portfolio at your own individual level as you wrestle with your own decision on what to trade and when
Page 15 – Consequence of Short term thinking
So if you think you can foresee and predict all of these things and then transpose them onto actual individual share purchases on a short term basis to profit from that trading, then as I say above Good Luck to you !
You need to stay the course in share investing Your need to be invested for a MINIMUM of five years and a MAXIMUM of forever to be successful There are no guaranteed short term trading techniques that work 100% of the time.
Don’t fall into the trap of thinking you can consistently trade your way to success
Page 17 – Time in the market not timing the market