Timing is a very important aspect; in some matters it is everything. But in investing, timing should be accompanied with patience, consistency and a little bit of trust in the market.

To further highlight what we are talking about, take a look at the story of these 2 investors who each contribute $10,000 per year.

Investing for Twenty Years or More

Now let us look at the potential portfolios of the two investors who continuously invest for 20 years in the S&P 500:

Proportion of Losses

Within one year, the proportion of losses decreases significantly.

This is one important aspect of the time-in-the-market guidance! The chance of loss is far greater for short-term investors than long-term investors while they are trading in the S&P 500. It is vital to remember that regular investment neither guarantees a return or protects against a loss, however, data suggests that investing long-term presents a more promising result.

Money Grows During Market Highs and Market Lows

Investors prefer to get in at the lows and profit off at the highs. Everyone would want to escape falls. Sometimes this fear that holds investors on the sidelines saves them the suffering, but it also means they miss the reward.

The two investors in our story overcame that fear and stepped out of the sidelines. In turn, both of them got their rewards and they collected their money’s earnings.

Timing and Patience

In the midst of the COVID–19 pandemic, we need to remember that historically, rising depression has been accompanied by the subsequent upswing. There is no certainty it will always happen, but as we said: to be victorious in the world of investment, timing, patience and a little bit of the trust in the market is needed.

Our Services