Every investor understands that knowing when to time the market is an exercise in frustration. You might know in hindsight, however one cannot anticipate when the timing is perfect. The combination of too many influencing factors, changing information, and the unknown work to drive the market in ways we rarely anticipate. With experience and training, one can develop a general sense of the direction and degree of momentum, however this insight is never 100% accurate. Yet knowing this does not mean that one is always immune from the temptation.
To invest, one does not need to accurately know the direction of the market. One must understand the context of one’s investment decision. Additional factors such as the character of the company’s management, corporate strategy, financial strength, anticipated earnings, and market position all come into play. In the end, one’s analytical decision comes down to a decision that is as much emotional as anything else. Do I believe this company will perform? Can I put my faith in this management team? Will I listening to additional information over time? As one answers these questions and more, one begins to form a view that the timing to invest is now.
Too often, I catch myself worrying about the timing of decision. My focus should be on the decision itself and the process of making the decision. Being first does not make a right answer. Rushing does not improve the quality of a decision. No matter how urgent matters seem, there is a time and place to act.
When one man died, the cries of those in pain could be heard all the way to heaven. God heard their hearts, yet refused to rush into a response. After a time and process, “then God raised him from death.” (Acts 13.30) We would do well to examine the model.
As urgent as life may seems, in a greater context the content of our response is as or more important than the timing.
Knowing what to do is as important as when.
Being ready and able to act is always good.