#195. Timing Is Everything

Timing Is Everything Because That Is The Way Nature Works

Generally, the unit trust industry is selling the idea that you can't time the market. They say everyday is a good day to invest. The longer you stay invested, the higher your profits will be.

Some people say, "You can't know for sure when is the peak and when is the valley."


Reality Is What You Think It Is

I have learned that when both people debate on timing the market, it all depends on both persons' perception on reality. It's all in our own mind.

Let's say two strangers walk pass a parked luxury car. One passing by the left side saw the car full of dents and scratches resulting from a recent minor accident. The other saw the right side as he walked pass, admiring the great shiny paint job.

The first person will see the car as undesirable. The other will see the car as a great car to own. They are neither wrong nor right. That was what they saw and that was their realities.

In life, that is the case too. The way we see things in life influenced the way we form our opinions on everything else. Some think there is no easy way to become rich and we have to work very hard. Some think money is abundant in this world, we just need to know how to get it.

A thing I learned very early in life:

Thoughts manifest into words,
Words manifest into actions,
Actions becomes habit,
And habit becomes character.

Be wary of what thoughts you form in your mind. They will eventually become your character. A comedian is always thinking of funny thoughts. They become funny people and that is their character. It's not the other way round. It's not because their character is funny, therefore they always think of funny things.

All things begin with thoughts.

When you want to raise your right arm, you have to first think about it. Every movement begin with a thought.

My thought is there is a set of laws of nature governing the whole universe. And timing is one of the laws.


Timing is indeed the way nature works

Let's start with something simple, the day and night. We know it is cyclical. Day follows night, night follows day. There is a precise timing to it.

In countries where there are four seasons, each season follows another. Spring then summer. Then fall and winter. Do not expect to have them in different order. It's cyclical.

Look at our body, when we are tired, we want to rest. It's cyclical. After a rest, you become more energetic. When you follow this harmony in nature, you achieve a balance and wellbeing.

When you are full, you just can't eat anymore. You just have to wait for a later time to eat again. Timing is everything.

The moon waxes and wanes. There is full moon and new moon. High tide and low tide follow the moon cycle. Even the Earth's orbit around the Sun is cyclical.

When we study the way the market moves, we will know what comes next. After every low, there is going to be a high. Learning to catch this trend is something we have to do well if we want to excel in unit trust or stock investment.

Because I have always believe that timing is important, it has opened my mind to studying the ways to be more accurate in timing when to buy and sell. However, if a person believes timing is nonsense, it will not move them to learn to time the market. Their mind is shut off to such possibility to market timing.

Yet, the simple investment rule is buy low, sell high. If we don't time the market, how else can we buy low and sell high?

You may get lucky when the trend is moving up. And we know the valley will come after the peak. If you are still riding the trend, you will soon find that you have passed the peak and going downhill. Timing when to get off at the station is important to lock in your profits. Simply staying on board the train when it goes downhill is akin to gambling and wishing.

The rule of buy low, sell high is fairly simple. Though not many are able to stick to it. It requires first of all an open mind. Then a deeper study and understanding. However, once you understand how to time your buying and selling, you will be amply rewarded. It's not rocket science. It's simpler than studying to become a surgeon.


The purpose of investment

Rule number 1 of investment is not to lose your money, according to Warren Buffett. But more importantly before this rule, there is another rule.

The most important rule is: Invest well.

Investing well means achieving high accuracy in all your buying and selling. Knowing exactly when to buy and when to sell. What happens when you invest well? You will never lose your money. That is why it is more important then the general investment rule number 1.

Profit will then naturally come to those who invest well and follow market timing. Many success stories in investment have always started with "I have bought it when the price was dirt cheap." Hidden in this statement is the knowledge of the investor on when to buy. It's the timing.