Timing the market or time in the markets?



Timing the market The possibility of earning a higher total investment return by timing the markets highs and lows is extremely low, in our view. This requires the consistent execution of correctly knowing when to buy the bottom of the market, avoiding selling before the market moves higher, and selling once you know the market has achieved its highest potential value for that period. The chart above illustrates how much mistiming the market can negatively impact an investor return.

A case for early bond investors As illustrated in the chart below, historically bond returns have been strong in the first year after interest rate increases have finished. This historical differential between the two has been 8.4% (bonds) to 3.3% (GICs). This is because bond yields often fall – and their market value increases – in advance of government action. This is why some of the bigger returns have historically been realized months prior to the start of a rate cutting cycle.




Opportunity outside of the U.S. Over the last decade, U.S. equities have exhibited strong performance relative to international equities, leading some investors to reflect on the value of owning international equity investments. Despite U.S. leadership, there are significant opportunities to be realized in non-U.S. markets – potentially enhancing diversification with strong returns. To that end, a recent RBC GAM study examines the top-performing companies over the past ten years. On review, only 24 of the top 100 companies for that period were U.S.-based.



You can enjoy the complete RBC Wealth Management report in PDF format here: Global Insight

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We appreciate the opportunity to support your financial journey, and look forward to helping you accomplish your long-term financial goals.