Can You Really Time the Market?

Henry Jennings  | Marcus Today 

Ah yes, the million-dollar (or billion-dollar) question: can you actually time the market?

Ask most fund managers or strategists, and they’ll give you the polished, professional answer: No, no, of course not, that’s impossible. It’s all about time in the market, not timing the market. You’re supposed to buy, hold, ride out the storms, and comfort yourself with soothing phrases like “dollar-cost averaging” — which, let’s be honest, is really just marketing spin for “keep shovelling money in even when it feels awful.”

Sure, averaging down works fine if you’re investing in broad indices or themes. But averaging down on a bad stock idea? That’s just throwing good money after bad — with a side order of stubbornness. Even the big boys fall into this trap. Phil King and his Opthea (OPT) disaster, or the analysts still cheering Magellan as it plummeted, are prime examples.

Now, the alternative approach — timing the market — is often dismissed as fool’s gold. But let’s be honest: if you could dodge the worst drawdowns and only invest during the sunny periods, your returns would skyrocket. Over the past decade, the ASX 200 has given about 9.3% total return (with dividends), and the S&P 500 has coughed up ~13.3% with dividends reinvested. But avoid the ugly bits, and you’d have crushed those numbers.

The catch? Once you’re in cash, you need to know when to jump back in — and that’s where most people freeze, paralysed like a rabbit in headlights.

Here’s where we’re a bit unusual (or reckless, depending on your view). We’re probably one of the few strategists or newsletters willing to go to 100% cash. And we’ve done it more than once — with success. We’re not pretending we can predict the market’s every twitch; we’re looking for the big, fat pivot points. The moments when you can feel the shift, when the game changes, when the force rumbles in the background and you know it’s time to move.

If you hadn’t looked at the market since 31 March, you might think not much has happened. But underneath? Everything has shifted.

Why can we do this? Because we’re small and nimble. We can slip in and out of positions like a cat burglar through an open window. Fund managers with $2 billion under management? They’re lumbering oil tankers trying to execute a three-point turn in a bathtub. Selling out to cash would crush their own prices on the way down. For them, holding 10% in cash feels like heresy. You, the nimble retail investor, are more like a speedboat. Zipping in, zipping out. And let’s not kid ourselves — their job isn’t even to make you money; it’s to beat the benchmark (and still somehow charge you fees while underperforming it).

But you? You, dear retail investor, have a superpower: flexibility. You can go to 100% cash and binge-watch The White Lotus while markets burn. You can wait it out. We don’t recommend doing it lightly, but the point is — you can. You have that choice.

We’ve used this advantage carefully over the past few years. We went to cash as COVID loomed, then re-entered when vaccines appeared (Japan postponing the Olympics was our signal of maximum bearishness). Nailed it. We sat in cash for months until Powell’s pivot signalled a US bull run — then we went all in. Recently, we went to cash again at the end of February when things felt frothy and stayed cautious through ‘Liberation Day’. To be fair, we stayed invested in the income portfolio because, well, that’s more about steady income than price jumps — and tax headaches matter more there.

Now, are we magical wizards picking every market turn? Hardly. Let’s not get drunk on our own Kool-Aid. We know we can’t nail every turning point — that’s the path to arrogance, hubris and eventual disaster. But being small and nimble has helped us dodge some nasty downturns and pounce on shifts when they come. The Trump backflip? We were ready. We went from full cash, back into the market, cautiously picking sectors like local and global banks — and it’s paid off.

So next time someone smugly tells you “You can’t time the market,” smile politely and know they’re mostly right — if they’re running a superfund or a lumbering institutional portfolio. But you? You’re not driving an oil tanker. You’re driving that speedboat. You can slam the throttle, cut the engine, swerve on a dime.

Of course, tax still matters (and no, we’re not giving tax advice — that’s above our pay grade). But we can help spot the big-picture moves, the seismic shifts, the Draghi-style “whatever it takes” moments.

Yes, you’ll always risk missing part of the rebound. But we aim to jump on a moving train, not stand behind it trying to push it forward. Picking the absolute bottom? That’s for gamblers and psychics. Picking a trend? That’s much more doable — and far less stressful.

Remember: you’re nimble, you’re flexible, and you’ve got an advantage the big funds don’t.

Fingers crossed — it’s worked so far. Science? Pfft. Let’s call it a mix of strategy, luck, and a dash of nerve. Maybe having been in markets for 40-plus years helps. I would like to think so.

Having cash clarifies, it cuts through, for lack of a better word, cash is good. At times. At other times, fully invested is the way to go.

So next time someone says you cannot time the market? Tell them it is possible, and retail investors do it all the time. They just do it quietly and without fuss, proving the experts wrong.

It is your money after all. Invest it wisely. Stay nimble. Be that speedboat!

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