Timing The Market vs. Time In The Market

Rajeev Mudumba

Yiorgos Ntrahas on Unsplash

The best way to perhaps look at life is as a set of decades.

When you do so, you start seeing and experiencing trends of how you want to lead your life. Your priorities, wants, and needs change with such timeframes as life progresses.

But, at any given point, it’s a catch 22 when it comes to how you want to invest, whether in units of time or money. You want to maximize your returns but at the same time are pulled between short and long term needs.

And, then, there are things around gratification needs and mental peace that influence how you invest and how and when you seek returns. To each his own, some expect it now and others do not mind waiting for later gratification in the desire to maximize.

When it comes to financial acumen and the roller coaster ride associated with it, there is a lesson or two that 2020 has taught us. Market performance can be counterintuitive to the happenings around and attempting to time the market is a risky proposition.

While a quick profit may inspire you to go for a short-term gamble, there is no telling if it will pay off or not. However, all things considered, a long-term strategy can leave you conservatively better.

Markets tend to over-react in the short term both ways but typically tend to course-correct over the long term.

With that knowledge, will you protect yourself and refrain from emotional trading?

That is the million-dollar question that can leave you with or without those million dollars!

Fear or overconfidence can play havoc with your rationality in such emotion-driven trading. You need to take a prudent approach based on your short-term needs and long-term goals. What you make or lose can mean many more or fewer years at work, more or less money into that retirement pot.

To get a semblance of it right, instead of just timing the market, invest time in the market!

Learn and practice and then, your level of acumen improves with time showing you those short-term windows of opportunity where you may be at less risk to lose, nevertheless it’s still risky. But, an educated investor has that many more chances of grabbing an upswing than just going with the wind.

When you invest your time or money into a risk-prone opportunity, do so with what you can dispense of. Take stock of what you believe are your assets, liabilities, income and expenses. What do you hold in hand that you can still live without? This is what you need to invest in a portfolio you design, whether it’s one of stocks and bonds, or your time that you may invest in a side gig or hobby.

Burning your bridges and jumping all in is old school. You need to be pragmatic in your approach.

Seek counsel from those you trust. Educate yourself and act on this education. Markets and life are all about emotional rides. Be cautious as you ride up and down.

Ensure you do not just design your strategies but stick to them, for the short and long term. That is when you will see the fruit of your efforts in totality.

Time is a better friend than timing. All your short and long-term investment decisions, be it of your money or time, should be based on your needs and goals, and your risk appetite.

Remember, you are your best friend and worst enemy.

Know that every time you make a move.

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Rajeev Mudumba is a dynamic entrepreneur, executive, business strategist, coach, and advisor. He is also an accomplished author, speaker, and thought leader. Above all, Rajeev is a diehard optimist with a "can do" attitude. Subscribe to Plan B Success podcast on your fav platform or www.planb.live. Also, subscribe & watch on YouTube @ http://bit.ly/2YegieF. Don't forget to share & spread the word!

Ashburn, VA

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