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Is timing now more important than time in the market?

In its latest Flow Show note, Bank of America Merrill Lynch pointed out that, at current rates, it would take you 1387 years to double your savings in a 1-year German deposit account.


If one took those savings to the relatively booming shores of the US, it would only take 107 years to double one’s investment in a similar vehicle, the firm points out.

At the same time, government bond yields are compressing ever closer to 0% and people are living longer, all of which adds up to a fairly challenging environment for investors and begins to beg the question, is it time to ditch the long-held adage: Time in the market is more important than timing the market?

Source: Rubrics Asset Management

For Steven O’Hanlon chief investment officer at Rubrics Asset Management, the answer is yes.

O’Hanlon argues that while returns are liable to be lower going forward across all asset classes, volatility is going to be higher and, as a result the timing of investments becomes crucial.

“Because the overall return looks very poor going forward, your entry point becomes more and more important. If the market is going up 10% a year, very little matters because the compounding impact of that covers up any mistakes that are made as a fund manager or an investor,” he told Portfolio Adviser.