Everywhere we turn in life, we hear that timing is everything. I disagree, and submit that if you depend on timing to go right, you’re giving away too much control in your life. In the market, particularly, if the success or failure of your portfolio depends entirely on whether you can pick bottoms and tops, you’re doomed. Every legitimate market study ever done has shown that to be true. Let me save you some time in the School of Hard Knocks: You can’t time the market.
It’s not just you, by the way. Neither can I. Neither can anybody. What separates successful market-beaters from stick-with-an-index-fund investors is the ability to recognize gathering opportunity, and waning success. For example, you don’t know if we’ve seen the bottom in oil stocks due to the Gulf leak. What you do know, or should, is that beginning a gradual purchase program in that sector is almost guaranteed to beat the market going forward. The stocks cost half what they did two months ago, but their future is no different than it was back then. That’s gathering opportunity, and you don’t need to know the bottom to use it.
Similarly, if you think getting ahead at work means being in the right place at the right time, you’re living a Hollywood fantasy. Success comes from creating a pattern of momentum toward the right goals, far-off ones if possible, then putting them in place brick by brick. You don’t need to get on Oprah to successfully market a product. You don’t need somebody to get fired to move up. What you need is to know where you want to be, then never stop heading toward it.
Look insideThe Kelly Letter
I don’t think I’ve ever heard ‘timing’ described quite like this. Even in your previous books, did you use the phrase “gathering opportunity, and waning success” before? I like that phrase. Can you patent or ‘coin’ that phrase? By the way, thank you for the “chin up” advice from previous article.
Agreed that “Timing is everything” is a silly cliche. On the other hand, what you have just given might also be seen as a form of timing in “gathering strategy and waning sucess.” Ebbs and flows rather than tops and bottoms. We can all give examples of when exact timing is essential for success in some processes. For instance cooking a steak to taste. But good to be reminded again not to attempt to outguess the market. Or to despair for missing a high or a low.
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