Broker Check

Market Timing and Your Investment Strategy

June 01, 2020
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Hindsight is 20/20. It's only human to imagine what it might have been like to turn left instead of right on some fateful day. However, that sort of daydreaming is unhelpful when investing, especially when it leads you to try and time the market.

Since the beginning of the COVID-19 outbreak, we've seen a great deal of volatility. But, in the two months since March 23rd's record low, the S&P 500 has risen 33. 1, 2 While past performance doesn't guarantee future results, it shows how quickly market sentiment can change. 

We prefer a disciplined approach to investing. We combine a person's goals, time horizon, and tolerance for risk with our own understanding of the overall economic landscape. It boils down to this: in timing the market to avoid the "bad" day, you risk missing the "good" days, too.

Missing even just a few of those "good days" can really add up.

A national investment firm looked at a $10,000 investment into an S&P 500 for 38 years. By missing only the five best days over that period, the investment grew to $458,476. Meanwhile, if the money remained in the account untouched, it would have grown to $708,143. Past performance is no guarantee of future returns, but this illustration shows the long-term power of "time in the market vs. timing the market."3

Few life events are more stressful than a job loss. If you or someone you know is in this situation due to COVID-19, you'll likely have several questions about job hunting, unemployment, insurance, and health care.

Here is how we can help:

  • Obtaining medical insurance
  • Applying for Unemployment compensation
  • Replacing group life insurance
  • Reviewing group retirement & savings plans
  • Refinancing a home mortgage for a lower monthly payment
  • Financial planning for the future

As your financial professional, we understand that volatility can cause anxiety, and it can be tough to sit still when it's happening. But as we've seen lately, it may sometimes be best to tune out the noise and trust the strategy that's already established.

We always look forward to answering your questions, so if you have any, please reach out and let's set up a time to talk.

We hope that you have wonderful summer and stay tuned for news about our Half Time Report scheduled for August 6th. The content is developed from sources believed to be providing accurate information.

The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2020 FMG Suite. Investment adviser representative and registered representative of, and securities and investment advisory services offered through Voya Financial Advisors, Inc. (member SIPC). Kalejta Financial Management is not a subsidiary of nor controlled by Voya Financial Advisors. CN1201504_0621

[1] Putnam.com, May 21, 2020

[2] Reuters.com, May 21, 2020 - The S&P 500 Composite index is an unmanaged index that is generally considered representative of the U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.

[3] The Simple Dollar, May 21, 2020