Timing the market or time in the market?
Team Veye | 20 Dec 2021
Unused talent diminishes. Unused potential decays. Unused opportunity dies and unused money devalues What is not used is abused. Use it or you will lose it.
Unused opportunity and unused money part are most relevant and religiously followed by stock market participants, but with a different interpretation.
To understand the difference between time and timing, one needs to look at the difference between speculation and investing. Speculation is trying to take a bet on the future direction of the market and positioning your trades accordingly. On the other hand, investing is all about focusing on the quality of the asset and holding on to it for the longer term.
Impatient investors either try to time the markets or park their money without realising the value they bring in. They can have a look at this and start investing.
(Graphic source: MarketWatch)
To best understand timing the market, an anecdote from an experienced trader
“I attended a Party, recently, with a gathering of about 300 people and sat in the front row. A Lady started distributing snacks from the back row and unfortunately, it didn't get to us sitting in the *front row. Another Lady started handing out Drinks, from the front row.
But, by then, I had already moved to the Back row. And, so, the drink didn't get to me. I was irritated and stood up to leave. But, then, I saw three ladies each with A Big Bowl of vegetable Manchurian dry. This time, I tried to be Wise by sitting in the middle row.
One of the Ladies started the sharing from the Front, and the second Lady started distributing from the back. When they got to the middle row where I was seated, it got over again! Feeling frustrated, I bent my head, putting my Face in My Hands.
But, then, the third Lady tapped me & held out her Bowl I stretched out my hand and guess what was in the Bowl? Toothpicks
So don’t try to Position yourself & time the markets. If you are disciplined & patient, then, good returns will come to you automatically sooner/later
Otherwise, you will wrongfully position yourself for Toothpicks Only!!!!”
The reality is, it’s time in the market and not timing the market. Investors with a big picture mindset invariably reap the maximum fruits.
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