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Timing the market

Discussion in 'General Property Chat' started by standtall, 19th Jul, 2016.

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  1. standtall

    standtall Well-Known Member

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    I am currently reading Tony Robbins' new book on mastering money and one of the key takeaways is that an individual investor shouldn't try to time the market because humans always have the tendency to buy in high markets and sell in low markets.

    I think it's very hard not to buy in a rising market (such as Sydney example) but may be buy only if you are prepared no matter what. Buying in low market is also very hard (examples are Adelaide, Perth) where we justify the decisions by discussing economic drivers and what not!!

    My favourite quote from the book:

    Investing in markets is like having sex. You have the most fun right before the fun ends.
     
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  2. teetotal

    teetotal Well-Known Member

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    And the time spent on foreplay is directly proportional to the fun you have during Investing. ;)
     
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  3. Perthguy

    Perthguy Well-Known Member

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    That seems absurd on the face of it. Why on earth would a property investor sell in a low market. I have bought three times in a row in areas that were just about to experience significant price rises and sold 2 of those when the market for that particular product peaked. I only get interested in selling after the market has been significantly increasing for some time.

    I just bought half of a Perth IP and I found it very difficult to find a property where the numbers worked. But dead markets are my playground. I feel very comfortable putting in an offer when no one has turned up to a home open or where people turn up but are really not interested. No justification for the Perth purchase. The market is still falling and won't recover for some time.


    Sounds like shares, not property or I am completely different to his target market. I have the most fun at the start of a cycle. The further in, the less fun I have. I stop investing when prices get too high aka, the numbers stop working. Right before the fun ends is when I would definitely not have any fun, unless I am selling! :) :p
     
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  4. teetotal

    teetotal Well-Known Member

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    So basically you pull out before climax :p:D
     
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  5. standtall

    standtall Well-Known Member

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    More sellers & less buyers = low prices
    More buyers & less sellers = high prices

    Economics 101.
     
  6. Perthguy

    Perthguy Well-Known Member

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    Ah, ok. I was looking at it from the individual's point of view, not the market. The advice was to not try to time the market because people tend to buy when the market is high and sell when the market is low. For an investor, all that means is don't sell when prices are low.
     
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  7. standtall

    standtall Well-Known Member

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    Correct but the knowing something and doing something are two different things. We are all driven by greed and emotions in the end.

    I think the point they make is that it's more important to take a long term position in the market rather than trying to take advantage of cycles.

    How many of us are buying in Perth at the moment? We all know well that it's at the low end of a cycle.
     
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  8. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Hey.. I wanna be driven by:

    upload_2016-7-20_11-42-26.png

    :D:p
     
  9. Perthguy

    Perthguy Well-Known Member

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    I am investing in Perth now. I am buying when people are fearful. I have had success in the past buying when people are pessimistic and selling when they are optimistic. Best time to buy and sell IMO.
     
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  10. Azazel

    Azazel Well-Known Member

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    It can be difficult selling at the peak. I'm sure there were people who sold in Sydney in 2013.
    But if you've made your money, there shouldn't be any regrets. On to the next one.
     
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  11. dabbler

    dabbler Well-Known Member

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    Depends on who you are I suspect, but for many, that may be what a lot do, most listen to the TV or just get the idea to invest and go and buy, I know plenty of so called smart people who have bought at the peak and then after a few years of dealing with the property, offload at a loss when they probably no longer hear the boom stories or when sick of the bills etc.

    Yes, this is better than waiting till PC sentiment changes then you have to contend with busloads of Sydney investors each weekend pushing the price up and gatecrashing every open :)
     
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  12. Azazel

    Azazel Well-Known Member

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    What are you doing coach? ;)
    People generally don't listen anyway.
     
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  13. bob shovel

    bob shovel Well-Known Member

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    Did you get the irish version :confused: wtf. I thought the name of the game was to make money money not lose money o_O

    I better sign up to more spruikers I'm doing it all wrong
     
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  14. WattleIdo

    WattleIdo renovating Premium Member

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    There's so much wrong here I don't even know where to begin ...
     
  15. dabbler

    dabbler Well-Known Member

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    No, I do not get involved, don't share any of our business with anyone who is not like minded.

    Sometimes I get asked by people who may have a clue to what we have done, but they always seem to do the opposite (like do not buy OTP in Sydney, they go and get multiple units, not one.....duh), basically, most people just want you to to re affirm what they have in mind.

    That is ok though, as long as everyone is happy :)
     
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  16. MTR

    MTR Well-Known Member Premium Member

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    ... more important, how many purchased in Syd, Melb and Perth in 2013 when these markets were rising.

    I think timing the market is far more important than time in the market, and it ain't that hard
    don't need to get the date right you just need to understand that you have to get in within first 12 months, when media reports etc start filtering.
     
  17. skuzy

    skuzy Well-Known Member

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    are you referring timing the market to enter or exit or both?

    eg current situation in Sydney.. if time in the market is more important however most have said buying in Syd now is risky
     
  18. MTR

    MTR Well-Known Member Premium Member

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    both
     
  19. Perthguy

    Perthguy Well-Known Member

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    People have been saying you can't time the market. However, it doesn't take a genius to figure out Sydney is around the peak. There is a reasonable likelihood that after the peak, there will be a price correction. So, choice is to buy now and wait for the next boom (time in the market) or wait for prices to correct and buy closer to the next upswing (timing the market). My strategy has been to time the market (buying and selling) and I have got each decision right so far.
     
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  20. MTR

    MTR Well-Known Member Premium Member

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    have been doing this in 6 boom cycles now, started in 2001, I can guarantee you will make money. The other option is ignore market conditions and just buy, but the outcome won't be the same.

    for whatever reason many believe this is not possible;)
     
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