{"id":1984,"date":"2016-08-07T06:30:00","date_gmt":"2016-08-07T06:30:00","guid":{"rendered":""},"modified":"2025-11-07T11:30:20","modified_gmt":"2025-11-07T06:00:20","slug":"make-time-not-timing-work-for-you-in-the-markets","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/make-time-not-timing-work-for-you-in-the-markets\/","title":{"rendered":"Make \u201cTime\u201d Not \u201cTiming\u201d Work For You In The Markets"},"content":{"rendered":"
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“I understand the markets so well that I know exactly when and what to buy and sell”<\/em><\/strong><\/p>\n\n\n\n

– said no man ever!<\/p>\n\n\n\n

Let alone professional money managers, even the biggest investment gurus have never made such a claim. What they rely on, is their experience<\/strong>, in-depth research<\/strong> and constant reviews<\/strong> of their investments<\/a> that culminate into stellar strategies in the long run.<\/p>\n\n\n\n

However, when a first-time investor starts out  investing in stocks, a few fluke successes later, he ends up thinking that he has mastered the art of timing the markets and ends up burning his fingers more often than not. The biggest problem is being right twice, not just about selling stocks at market highs but also about buying at the bottom.<\/p>\n\n\n\n

\u201cTiming<\/strong>\u201d the markets encompasses not just the art of determining when to exit 100% from an asset class, but having the forecasting skills that helps one to determine how to buy a stock at the bottom and selling it at a peak<\/strong>. Needless to say this is a skill that even the top market players do not claim to have mastered.<\/p>\n\n\n\n

However, what most investors understand about timing the market is tilting one\u2019s portfolio quite often and increase or decrease exposure to certain stocks in order to make the most of market opportunities. But this can be a potentially disastrous action as it may erode the value of his stock portfolio<\/span> as more often than not, these investors do not have the required expertise to make such calls on a regular basis and moreover it\u2019s impossible to time the markets.<\/p>\n\n\n\n

What professional managers do on the other hand is strategic allocation or rather distribution of the corpus they manage by syncing it to the market trends to maximize gains for their investors. While professionals may be using market timing as wealth creation strategy<\/span>, an individual investor trying to do the same by investing in equities may potentially miss out on the best performing cycles in the market. At a time when market volatility is at a peak, attempts to time the market not only hurt the value of his stock portfolio; investors can incur additional expenses such as trading fees and taxes.<\/p>\n\n\n\n

Financial prudence<\/strong> lies in wealth creation<\/strong>, and to create wealth, time is the key ingredient<\/strong>. An investor should focus on detailed and thorough research of the companies that have exceptional growth opportunities and hold them till there is no change in the fundamentals of the company. This he should do after carefully assessing his risk tolerance<\/a> and chalking out his long-term goals before investing in equity markets.<\/p>\n\n\n\n

While striving towards the achievement of their long term goals what works best is the purchase of shares after in-depth research and analysis and holding them through market cycles with patience<\/strong>. In investment parlance, it is called the \u201cbuy and hold\u201d strategy that essentially involves spending time in the market and taking advantage of the power of compounding<\/a>. Holding stocks patiently over time helps the businesses that one has invested in attain maturity and yield better returns in later years. That indeed is the power of compounding<\/a>.<\/p>\n\n\n\n

It\u2019s not just better returns; the power of compounding can also help investors manage risks over time. As is visible from the illustration below, while rolling returns from the benchmark BSE Sensex<\/a> increase steadily for as long as the investor remains invested, the probability of negative returns not only comes down as time progresses, it comes down to nil after 5 years.<\/p>\n\n\n\n\n\n

Besides, the buy and hold strategy does not mean ignoring the long term investments<\/span> once made.<\/p>\n\n\n\n

As investing goals change, it is prudent to give one\u2019s stock portfolio periodic check- ups to ensure that the investments are on track towards the meeting of one\u2019s goals<\/strong>. For instance, investments in mid-sized high growth companies should be reserved for goals that are more than five or more years away. Similarly, those nearing retirement may want to trim down equity exposure to the minimum and invest in safer avenues.<\/p>\n\n\n\n

Some investment experts say that for those interested in \u201ctiming\u201d may do so by segregating a \u201cplay bucket\u201d from one\u2019s long-term investments. We however, do not subscribe to this view and strongly believe that timing the markets to make a \u201cquick bucks\u201d cannot be compared to making a sound investment. As an investor, if you have carried out adequate research and are investing in a fundamentally strong company, a 10% upside or downside should not matter to you and you should not be swayed by \u201cmarket sentiment\u201d<\/strong>. By sticking to this principle and focusing on your long-term goals there is no stopping you from creating wealth over time.<\/p>\n\n\n\t\t

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Related investing topics<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n How to Invest in Share Market? <\/h3>\n \t\t \t

Considering the volatility, investing in stock markets is both an art and science.<\/p>\n <\/div>\n \n \n <\/div>\n <\/a>\n <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\n 5 Best Places To Live After Retirement In India <\/h3>\n \t\t \t

While some retired people set sail on voyages worldwide, others look forward to spending their time in relaxation and comfort.<\/p>\n <\/div>\n \n \n <\/div>\n <\/a>\n <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\n 90% People Lose Money in Stocks? <\/h3>\n \t\t \t

Isn't it shocking? But it is a fact. There are countless reasons why investors lose money in stock markets.<\/p>\n <\/div>\n \n \n <\/div>\n <\/a>\n <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\n Is Long Term Investing Always Safe? <\/h3>\n \t\t \t

Let\u2019s understand what long-term means before we explain why Long Term Investing may not always be safe.<\/p>\n <\/div>\n \n \n <\/div>\n <\/a>\n <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t\n\n\n\n

Read more:  How Long-term investing helps create life-changing wealth \u2013 TOI<\/a>.<\/strong><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

“I understand the markets so well that I know exactly when and what to buy and sell” – said no […]<\/p>\n","protected":false},"author":5,"featured_media":1985,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1984","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/1984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/comments?post=1984"}],"version-history":[{"count":5,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/1984\/revisions"}],"predecessor-version":[{"id":61925,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/1984\/revisions\/61925"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media\/1985"}],"wp:attachment":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media?parent=1984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/categories?post=1984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/tags?post=1984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}