Timing is everything, but rarely possible



It is one of the oldest investment sayings of all: you can't time the stock market. But that doesn't stop people from trying.

During the summer, plenty of equity analysts were predicting a disastrous September and October.

Many of them were chartists, specialists who believe you can predict future share-price movements by poring over graphs and bar charts plotting past movements. A bit like a fortune teller reading your tea leaves, only a little more scientific.

Chartists read the runes and warned investors of something called a "double death cross", where adverse stock market movements collided with a plunge in the price of copper, to suggest a share-price slump in the autumn.

Anybody who sold off their portfolio in terror will be rueing the day because stock markets soared instead.

Nobody can predict where stock markets will move next, says David Kuo, the director of the stocks and shares website Motley Fool.

"If you could time the market, you would become an instant millionaire. But it can't be done because shares don't always move for the most logical reasons," he says.

In the short term, they can move in any direction and without warning. "Second-guessing their movements is tantamount to trying to catch a house fly with a pair of chopsticks." You might get lucky once, but you probably won't make a habit of it.

"Some seasoned investors believe they can identify shares that have been undervalued by the market. If they are right, and are prepared to wait until the market agrees with you, those shares could move sharply higher. But that is as close as anyone can get to timing the market."

So put down those chopsticks and try this instead. "For most private investors, the best strategy is to regularly drip money into the market," Mr Kuo says.

"That is unquestionably the best way to smooth out inevitable peaks and troughs in share prices."

It won't make you an instant billionaire, but it won't make you an instant loser either.

* Harvey Jones

COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
 
 
 
 
 
 
 
The specs: 2019 Jeep Wrangler

Price, base: Dh132,000

Engine: 3.6-litre V6

Gearbox: Eight-speed automatic

Power: 285hp @ 6,400rpm

Torque: 347Nm @ 4,100rpm

Fuel economy, combined: 9.6L to 10.3L / 100km


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