Timing: Part III

May 06, 2019 | Jeremy Goldfarb


Stop me if you've heard this before....actually don't, otherwise there would be no point to what I am about to write.


Timing the market doesn't carry a big enough reward for the risk that you take.


I have written about this recently in 2 posts, and provided insight and data to back it up, so why not some more right?!


Time horizon matters more than anything else as is exhibited in the following article (Find the article here). The longer the period the investor has, the less timing actually matters, so reduce the stress and adhere to your targets. The second part of this point is that you can almost effectively reduce your downside risk to 0 over time by including fixed income in your portfolio. An interesting piece in the Post (Find the FP article here) this morning highlights this very point.


The quick takeaways

1- Understand where you are

2- Don't take on risk your time horizon can't afford

3- over time, bonds reduce risk and generate returns

4- if your time horizon is extensive, you can afford to overweight stock

5- don't be swayed by headlines (I know this last one is hard as hell)