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Strategise your investments with long-term vision

Prioritise “Time in the Market”, Not “Timing the Market”

This article is an educational piece on the importance of taking a long-term investing approach. For informational purposes only.

Investments should be built for the long term

“Trading” and “investing” are frequently used interchangeably. Both terms represent putting your money into financial assets such as stocks, exchange-traded funds, and unit trusts to grow your money, but they mean very different approaches. “Trading” activity tends to time the market to buy low and sell high, in hopes to make profits over a shorter term. By contrast, “investing” means spending time being invested in suitable financial instruments and taking a steady approach to grow the value of one’s investments over the long term. Of course, there are others who take a combined approach of trading and investing to meet their short-term and long-terms goals.

At Standard Chartered, we believe spending time in the market is a key strategy to achieving one’s core financial goals. While we understand that with a global recession on the horizon, it is natural to feel uneasy and want to react, it is however important not to lose sight of your long-term investment goals. As such, “Time in the Market” with well advised adjustments to your portfolio will likely prevail over “Timing the Market” during this critical period. Read on to find out how to stay disciplined and work towards your long-term goals.

Time in the Market, Not Timing the Market

As the old investment adage goes, “it’s not about timing the market, but about time in the market.” Here are three reasons why “Time in the Market” matters more than “Timing the Market.”

#1. The exact peaks and troughs of the market are difficult to predict, if not impossible.

Buying low and selling high by timing the market is an idealistic concept that few people are able to consistently succeed at. A combination of skill and fortuity is needed to accurately predict market peaks and to catch the right time for repurchasing.

#2. You are less likely to fall prey to emotional investing.

Timing the market can be emotionally exhaustive, as you have to monitor your investments constantly and battle emotional highs and lows. By prioritising your time in the market, you can better focus on your investment objectives and avoid making impulsive decisions that are led by optimism or fear.

#3. A consistent approach rides out bumps and helps you avoid accidentally missing some of the best performing days.

Timing the market wrongly may lead to missing some of the market’s best performing days. By staying invested, you can cushion the impact of market fluctuations over time.

The bottom line

Economic downturns do not last forever, and the economy will eventually recover. The crucial thing to remember during this time is to stay focused and true to your long-term investment goals.

At Standard Chartered, our ‘Today, Tomorrow, and Forever’ approach to Wealth Management is designed to help you meet your near-term needs and grow your wealth for the decades ahead. Growing and protecting your wealth successfully requires following a few important principles. “Time in the Market” is one important guardrail to keep your investing on the right track. If you would like to find out more, you may visit our SC Wealth Select website.

Disclaimers:

This article is for general information only and it does not constitute an offer, recommendation or solicitation of an offer to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This article has not been prepared for any particular person or class of persons and does not constitute and should not be construed as investment advice or an investment recommendation. It has been prepared without regard to the specific investment objectives, financial situation or particular needs of any person or class of persons. You should seek advice from a licensed or an exempt financial adviser on the suitability of a product for you, taking into account these factors before making a commitment to purchase any product or invest in an investment. In the event that you choose not to seek advice from a licensed or an exempt financial adviser, you should carefully consider whether the product or service described herein is suitable for you.

You are fully responsible for your investment decision, including whether the investment is suitable for you. The products/services involved are not principal-protected and you may lose all or part of your original investment amount.

Standard Chartered Bank (Singapore) Limited will not accept any responsibility or liability of any kind, with respect to the accuracy or completeness of information in this article.

Deposit Insurance Scheme

Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$100,000 in aggregate per depositor per Scheme member by law. For clarity, these investment products are not deposits and do not qualify as an insured deposit under the Singapore Deposit Insurance and Policy Owners’ Protection Schemes Act 2011. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.

The information stated in this article is accurate as at the date of publication.