The investing Timing factor

When we think about the different investment instruments and the investment practice in general, one of the factor that very often discourages most people is undoubtedly time. Nowadays we are so used to the concept of “all at once” that we have lost the precious value of time.

How many times have we tried to learn something new, some new technique that could satisfy some of our desire or need, but then, since the results was not coming shortly, we gave up immediately by saying “it doesn’t work”.

time to investMost of the time what we unconsciously thought was “I don’t want to study and practice, it takes too much time,” and then went back trying to find a new technique that promises an immediate solution. But again, we thought it would have taken too much, so we kept looking for the “all at once” and effortlessly solution.

Hardly ever we have found what we hoped for, in fact many of our desires and our aspirations are often left unfinished. Just think about that time when we tried to study a foreign language with one of those courses that promised to make us learn it in 24 hours, without any effort, just by listening to the tapes.

Then when we found out that instead, to really learn it, it was required a serious study and especially a lot of practice, we immediately abandoned our purposes.

This is what most people does.

 

The time needed for the investments

 

Some, instead, behave differently.

Some dwell on the first technique, or even better, they take some time at the beginning to find a technique that seems worthy, professional, suited to their way of being. At that point, they remain focused only on that, and they give themselves the right time to learn it, knowing that every day, spending even just a few minutes, they will become more and more masters of this new discipline.

These people give themselves time, and they also give time to the technique to make sure it expresses the results.

When you invest is exactly the same thing. Suppose you invest in a strategy of Forex trading, a strategy that statistically wins 65% of the time it opens a transaction. You must have clear in mind that, once you start, you have to leave enough time to your money to work with that strategy.

Let’s suppose also that for an unlucky situation, the strategy ran through a bad conjuncture in which that 35 % of losses, as was statistically predicted,  come, but all together and all at once. Many make the mistake at that point of not giving time for the strategy to accomplish its cycle.

They take themselves out, they withdraw their money, and in that moment those 65 % of winning percentage started to come, here’s how that reasonable expectation materializes into a real revenue. Too bad for those who had left before it was realized.

 

When also will power is missing

 

The time factor is also the reason why many prefer to entrust their money to other investors, so that the latters will make the choices for them. They didn’t have the time, and maybe also the desire, to learn how to do it on their own.

As recent history has taught us, these people have given control of their money to other people, they trusted them, and this trust, unfortunately, has not been repaid. Often those who entrust their money to other don’t even know where their money will end up, or what will be actually bought. And that is when they get bad surprises.

As Warren Buffet says

“Risk comes from not knowing what you are doing”.

Aside from the varied world of scams and companies that implement them (the most popular recently was the Madoff’s one), once a person entrusts his money to another, he inevitably loses control over it.

Who manages it, many times don’t really invest it where there were some possibilities, but only where their private or corporate interest was.

In your opinion, a company that has strong interests in construction companies, will not use your money to invest in buildings? If they would have done so decades ago it would have been a bargain. But if they still continued to do so while the housing bubble was bursting, the story would have been different. That would not have been reasonable expectation, but only personal interest.

 

The importance of the correct time

 

money growing on treeThat’s why taking the time to learn how to invest, and leave your money the right time to bear its fruit, are certainly two of the most important factors for the success in this discipline.

Linked to the time factor, there are also the expectations on how much and how quickly you want to earn. Even here the situation is simple, ie, to make your money work intelligently and as safe as possible, it takes the right time and the right approach.

As you have seen, the right time is needed for your investment to make its cycle and demonstrate that reasonable expectation. The right setting of your strategy is fundamental to allow your fund to survive in any circumstance, to resist in the negative situation, and to have always the strength to start again.

To explain it better, if you have an investment account of $ 10,000, and you invest everything in a strategy that risks the 50% for trying to double the capital within 3 months, then you are putting your money in a big risk. If your intent is to double or triple your capital in a few months, I assure you that, within a few months or even less, like a few weeks, your account will be halved, if not burned completely.

To find out if a gain percentage in a short time is too exaggerated, try to convert it into a loss, and ask yourself if you can accept it. For example, if with an account setting you are convinced to get the 50% return on the capital within a month, try instead to ask how it would be if, in a month, you’ll lose half of your account, because almost certainly it will happen just that.

I guess that now you might ask: “How long this “right time” you are talking about is?”, “What are the timelines?”.

Warren Buffett says

“Our favorite holding period is forever”.

Now, in order to not start with a time period so extreme, that could cause some problems for those who do not have the same experience of who has been the richest man in the world (and still remains in the top 5 positions thanks to the art of investing), with respect to the point of view we are going to show you for Social Trading, the time period we prefer is definitely “one year”, for two main reasons.

1)      Before choosing an investment system, you must be able to see the performance of at least one year. I don’t mean you have to stay for a year to observe it. I mean you must be able to access the data of all it has done for at least one year, with the help of special tools that can make it easy to read them. And if you have 2 or 3 years, even better.

2)      Once you have reasoned about how you want to invest, how much you want to invest, on who you want to invest, and you’ve done all the calculations, considering the reasonable expectations but especially the risk you want to take, at that point you have to let this strategy run with your money for at least one year.

Of course, there may be exceptions, but these are good starting points. If after only a month, for unforeseen events, everything starts to go against your expectations, there’s obviously no need to wait a year to intervene.

In normal cases, if the conditions that have led you to make a certain kind of choices remain valid, then you have to leave enough time for your investment to work, and a year is usually the right time to be able to draw your own conclusions.

 

road to success in investing

 

Then, there is the time you have to give yourself to learn this new discipline. On this factor, now you have an edge because we have created a complete path to show you how to invest with this new opportunity called Social Trading.

But please, do not jump immediately ahead, remember this lesson, give yourself the time to read all of the courses, at least once, but even better if you read them twice.

Metabolize all the concepts. Then start.

If you make one accurate step at a time, you will arrive straight and precisely to hit your goal. Those instead who run in a disorderly way and jump the steps, they are more likely to miss completely the target.

Usually people, even though they had understood the importance of time, at the end of a reflection they tell me something like “It takes too much time anyway. Do you know that it would take me at least 2 years to invest and get the result I want? “.

To all these people I’ve always answered with another question:

“Well, will your goal be closer 2 years from now if you don’t even begin?”.

 

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The investing Timing factor ultima modifica: 2014-12-23T18:27:17+00:00 da Filippo

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