• Sébastien Van Passel

Time not timing (part1)

The topic exposed in this article is probably the most representative of what "investment behavior" means.


We could explain this better through 2 questions for people that have a diversified portfolio...and time :


Do you prefer to invest when the market is growing up ? most of the time the answer will be yes.

  • Do you invest when all the stocks are falling down? be honest ...probably not.

And both decisions would be wrong on a long term basis. So have a look on this chart, can you recognize your personal reaction?



"Tell me, dear experts in portfolio management, what are your solutions?"

Back to Basics :


What are the general rules to observe more than ever in a volatile market?

  • Be diversified (at least 50 stocks in different sectors and countries)

  • Asset Allocation strategy (short term = cash; long term = stocks)

  • Time not Timing : nobody knows when the market will recover or crash so your best friend if you have a good investment strategy is to wait 

  • You have cash and you don't need that money in the coming months but you are afraid to invest now : you can chose to invest regularly (Cost average effect) and you'll reduce the volatility of your portfolio.

Buy and hold strategy vs timing the market :

The buy-and-hold principle is based on the notion that a good investment will generate reasonably attractive returns over the medium-to-long term. This simply means ignoring short term movements in the market. Which could be the conclusion of this article.


Sources :

http://www.mieranadhirah.com/Investment

Tips : https://www.linkedin.com/today/author/13592232 

  • Grey Google+ Icon
  • Grey Twitter Icon
  • Grey LinkedIn Icon
  • Grey Facebook Icon

Sébastien Van Passel |sebastien@4investors.eu  |+32.470.369.636 | Belgium

Proudly created with Wix.com

  • Twitter Social Icon
  • LinkedIn Social Icon
  • Facebook Social Icon