John Husselbee: The perils of trying to time the market

'5% of months determined performance'

clock • 5 min read

One of the clearest lessons from history is that trying to time moves in and out of markets to catch the peaks and troughs rarely works, says John Husselbee - and yet so many investors still try to beat the odds

A common saying in investment circles goes that timing the market is a fool's game, whereas time in the market - ie keeping your money invested - will typically lead to solid results. And, to that end, new research from Morningstar makes this point in the starkest possible terms. In response to the question ‘is there a good time to buy or sell actively managed funds?', the report concludes with a resounding no, based on the fact most equity performance over multiple decades has come down to just a few months. Being out of the market for these so-called critical months can have a massive ...

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