Weekly “Focus’ and Time in the Market

Can investors time the market? We get that question often and believe the answer is not on any consistent basis. Sometimes one does get lucky and times a purchase or sale perfectly. However, we do believe it’s “time in the market” that matters. The chart below shows that investors can get positive returns even if they pick very poor timing for the initial investment. For example, the early 2000s saw the .com crash and 2008 witnessed the great financial crisis. If you invested at the beginning of 2000, that was poor timing for sure but as the data shows, 25 years later the investment in the US stock market would have still produced a 7% annualized return (source: The Compound Media, S&P 500 returns from YCharts).

 

 

Here’s the same chart going back to 1993 and although hard to read, it shows that the longer one is invested, the more likely to experience positive returns. You will also see that the chart has much more green (positive returns) than red (negative returns) which is comforting to remember when the market has its inevitable corrections.

 

 

This week’s "Focus" from our economics team is attached.

 

Have a great weekend,

 

Brad

Senior Portfolio Manager and Senior Investment Advisor