• Team Webb

Market Timing

Market Timing: The strategy of making buying or selling decisions of financial assets (often stocks) by attempting to predict future market price movements.

Basically, trying to sell at the high price, and buy at the low.

Taking a look at the effect of attempting to time the market for the purpose of buying and selling, offers some interesting observations.

If you invested $10,000 in 1980 in the US S&P 500 index (this represents the top 500 American companies performance), today it would be worth somewhere near $660,000*. This is as a result of remaining IN the market for the full 10,000 days of trading.

However if you were caught up in the idea that you could time the market and you tried to sell when the market was high and buy when the market is low, here lies the danger.

Let’s say, over those 10,000 days, you missed out on the 10 best days of investing. Your portfolio would now only be worth $320,000*. Over 50% less because of TEN. DAYS.

There is a far more reliable strategy to maximise your return over the long term, which helps to guide us through market volatility.

We start with a well-diversified portfolio across a range of asset classes in line with your agreed tolerance to risk.

Then you implement a disciplined rebalance strategy back to your agreed asset allocation weightings. This will allow you to top up your assets that have fallen in price and sell assets that have risen in price.

Investing can draw on emotions, though this strategy works to remove some of the emotion by creating a process which occurs automatically at regular intervals.

If you would like to discuss how a financial planner can help you build a strong financial future, please contact our office on 02 4244 4054 to book a chat with James.

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Webb Financial (Financial Planning) Pty Ltd T/As Webb Financial ABN 37 622 060 422 and James Mottram are Authorised Representatives of Synchron AFS Licence No 243313 for financial planning services.


18 views0 comments

P: 02 4244 4054


F: Don't be hilarious! That's way too old school!

Suite 4, Level 4, 166 Keira Street

Wollongong NSW 2500

  • YouTube
  • LinkedIn
  • Facebook
  • Twitter Social Icon
  • Instagram

Webb Financial (Financial Planning) Pty Ltd T/As Webb Financial ABN 37 622 060 422 and James Mottram are Authorised Representatives of Synchron AFS Licence No 243313 for financial planning services.

Credit Representative 525865 is authorised under Australian Credit Licence 389328

Accountants Wollongong, Financial Planners Wollongong, Mortgage Brokers Wollongong,Accountants Wollongong, Wollongong Accountants, Financial Planners Wollongong, Wollongong Financial Planners, Small Business Accountants, Small Business Tax Accountants, Accounting Services Wollongong, Wollongong Accounting Firms, Financial Advisers Wollongong, Tax Advice, Superannuation Advice, Investment Property Advice, Self Managed Superannuation Funds, Investment portfolio advice Wollongong, business advice specialists, Xero advice, accounting software, budgeting and financial planning, personal taxation, personal financial advice, investing money, Wollongong, Illawarra, South Coast,,, Mortgage Brokers Wollongong, Finance Broker, Lending, Lenders,

Webb Financial (Accounting) Pty Ltd ABN 37 622 060 422

Webb Financial (Financial Planning) Pty Ltd ABN 82 624 258 224

Webb Financial (Lending & Finance) Pty Ltd ABN 15 643 433 890

© 2020 by Webb Financial