Minuk's Musings and Pink Floyd (Time)

Exactly 52 years ago in January 1973, Pink Floyd finished writing their album “Dark Side of the Moon”.

 

 

My favourite song on that album is “Time”, a tune that explores the fleeting nature of time and regret of wasted moments.

 

The messages in the song resonate beyond music and are especially meaningful when we think about investing.

 

Many investors worry about the perfect time to invest, overcome with fear of a massive market drop right after they commit their money. And more often than not, as the markets continue to rise over time, they chase an entry point that only seems further and further away.

 

The lyrics in the song “Time” remind us of the dangers of inaction or misplaced focus:

 

“And you run and you run to catch up with the sun, but it’s sinking, racing around to come up behind you again.”

 

But history and the long-term returns of the S&P 500 teach us a vital lesson that trying to time the market is a losing game.

 

Even if one was to invest at what seems like the worst possible moment, such as when the financial crisis of 2008 was beginning, time itself becomes the ultimate healer.

 

The average return for a dollar invested in the S&P 500 in January 2008 is 10% after 16 years, despite being the worst entry point in 2 decades.

 

 

Our focus shouldn’t be on timing the markets but on spending time in the market. The risk of short-term volatility is eclipsed by the risk of staying on the sidelines, paralyzed by fear or indecision. By staying committed, patient, and focused on the long-term, we allow time to work its magic.

 

 

Have a great weekend,

 

Rich

Investment Advisor