Morgan Housel once said that every future market crash looks like a risk.
Yet, with the same breath, every past market crash is viewed as an opportunity.
The contradiction in the statement sums why investors find it hard to know when is the right time to invest.
This decision is harder than it looks.
Let’s take a closer look at this topic to help you decide.
Timing the Markets
Below is the long-term seasonality chart for the S&P 500 Stock Index.
Based on the chart, we can make some observations on investing in general with respect to expectations and timing.
Source: Bloomberg, Author’s Calculations (as of 21 July 2021)
1. Expect the stock market to be volatile
It is clear that within any given year, the stock market tends to be very volatile.
There are fairly large price movements, up and down either way throughout the year.
In general, the down moves tend to be faster and sharper than the up moves....