Timing is Everything

A former Chief Investment Officer at my prior firm used to say “timing is everything!”  At the surface, a very simple phrase but in reality, a very important truth in investing (as in life!)

This is what he meant:  you might have the fundamentals right with exactly the best possible analysis, but if you miss the timing you miss the above market returns.  Or, in other words, fundamentals tell you “what” to buy and technicals (market timing) tell you “when” to buy.  Of course, no one can predict the market, so the “when” is almost impossible to achieve.

The chart below is a good example of this.  Coming out of 2016, the Dow Jones Moderate Index (global) had a great run in 2017 (note the nicely upward sloping line with not much volatility).  Since then, 2018 into 2019 has been much choppier.  In fact, the steep dips and steep climbs since the end of August 2018 has resulted in a meek 1.2% return (through June 14, 2019).


Consequently, 2019 YTD performance is mostly irrelevant without a look-back to 2018 Q4.   We have been in a trading range since January 2018 with the great 2019 YTD performance simply a broad re-trace from the 2018 Q4 lows.  As always, plenty of discourse on where we go from here.