Reblog: The dangers of timing the markets
Traditional wisdom suggests that when it comes to investing, timing is everything. But is it?
We’ve witnessed shock after shock in the political arena over the past year, which has repeatedly jolted the markets into action.
For investors, it’s difficult to sit tight amid all this noise, and you might feel encouraged to sell out of stocks to try to protect yourself from the falls. But by selling out early, you could end up missing out on the gains.
Timing the markets is effectively a double whammy in crystal ball gazing, because not only do you have to predict the outcome of these events (and just note how shocked most of us were about the Brexit vote), but also how the markets are going to react.
Disaster domino effect
Mark Northway of Sparrows Capital says the events which have transpired over the past year have provided opportunities for fund managers to “test their mettle” and trade in and out of the turbulence.