Blog: Timing Isn’t Anything
October 13, 2022, wouldn’t have been a day anyone wanted to purchase stocks. The S&P 500 had fallen almost over 25% to its lowest point for the year, inflation was at a 40-year high of 8.3%, and the Federal Reserve was projected to raise interest rates another .75% in November. In fact, many people were heading for the exits.
But, as it turned out, October 13th was the low point for the S&P 500 for 2022, and it has since risen over 30%. In retrospect, it would have been a great day to invest.
In my many years as a Financial Advisor, I’ve counseled my clients that timing the markets doesn’t work for the simple reason that, to be successful, you need to be right twice. First, you need to be right that the market is at its highest point, and that it’s time to sell. Second, you need to be right that the market is at its lowest point, and that it’s time to buy back in. Nobody has ever been able to consistently do both.
One thing history tells us, however, is that staying invested through all kinds of markets has been a winning strategy, even through volatile markets.
The past 15 years provides us with an excellent example. In July, 2008, the world was about to experience the Great Financial Crisis and a major market crash. But if you invested in the S&P 500 at the worst possible time (in July, 2008, just before the crash that would happen in a few months), 15 years later you would have earned an average return of 10.845%,.
Put another way, despite 3 crashes (2008 Great Financial Crisis, the 2010 “Flash Crash”, the COVID Crash) and the Bear Market of 2022, if you had invested $10,000 in the S&P 500 in July, 2008, it would be worth approximately $43,000 today. If you had invested and also added $100 each month, it would be worth over $90,000 today.
We certainly can’t predict what will happen in the future. But one thing is certain: there will be events that occur that will make us believe that the sky is falling and “this time is different.” In those times, it’s best to try to filter out the bad news and remember that time in the market, not timing the market, is usually the best strategy.
As usual, please don’t hesitate to contact me with questions.
I hope you enjoy the rest of your Summer!
 You cannot invest directly into an index
 As of the close of business on July 26, 2023
 With dividends reinvested
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All performance referenced is historical and is no guarantee of future results.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Investing includes risks, including fluctuating prices and loss of principal.