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Chris Hladczuk
Wed Oct 26 2022

The Downfall of Timing the Market

You know the best way to end up broke?

Timing the stock market.

What do I mean?

Here’s the breakdown and how it applies to changing interest rates for your startup…

What does “market timing” in finance mean?

Buy a stock at a low price and sell it at a higher price.

Buy low. Sell high.

Does this sound simple?


But is this impossible to do in practice?



Because daily stock price changes have nothing to do with business value:

  • A war could breakout in Ukraine
  • Fed economic policy could change
  • Regulation could change

A million factors affect short-term prices.

So trying to time the bottom or top of the market is a fool’s errand.

Peter Lynch averaged a 29% annual return over 13 years running Fidelity’s investment fund.

Here’s what he says about market timing:

“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” - Peter Lynch

How does this apply to interest rates?

Recently, there has been a bunch of press on changing interest rates.

Like this:

The biggest banks in the world have an army of economists and forecasters.

They have 1 goal:

Predicting interest rates.

But back in February 2022, JP Morgan told everyone rates would be 2.25% by March 2023.

Today, JP Morgan is telling us that it will hit 4.25-4.50%.

JP Morgan was incredibly wrong. And so were all the big banks.

So what?

Because just like buy low, sell high never works.

Guessing on interest rates is a fool’s errand too.

Okay, so what’s the solution?

Conventional wisdom in stocks:

Buy and hold a stock you love for a long time.

The same is true for rates.

If you see an attractive interest rate today, don’t hope for a better option tomorrow.

You can act now.

And go back to building your business.

I’ll leave you with a great quote from Warren Buffett:

“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”


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