Why time in the market beats timing the market when it comes to investing

“Time in the market beats timing the market.”

It’s a common investment adage, sometimes described as the “golden rule” of investing. But constant repetition doesn’t make it any less relevant today.

“Timing the market” is a strategy by both professional investors and amateur stock-pickers. Their approach is to try and buy stocks when the value is low, and then sell when it’s high.

Sometimes it will work, and they will show a tidy profit. Frequently, however, even seasoned professionals fail to accurately predict market movements.

History and experience show that you’re more likely to see the value of your investments increase over an extended period if you simply sit tight and do nothing rather than constantly adjust your portfolio holdings. Read on to find out why.

Research shows the perils of trying to time the market

Research published in...

What is a pension?

A Pension, simply put, is a long-term savings plan to build up a lump sum of money for you to live off in retirement.

Why should I save into a pension?

To ensure you can live comfortably in retirement, as the state pension alone may not allow you to do so. Most experts suggest that you need a pension of at least half your pre-retirement income to live comfortably in your retirement years.

Tax relief is another reason to save into a pension. You will receive income tax relief on contributions made to your pension. This means if you pay tax is 20% a €200 pension contribution each month will only cost you €160 after tax. If you pay tax at 40%, a €200 contribution will only cost you €120 after tax

State pension ticking time bomb

The State Pension is paid out of taxes collected by Revenue, and currently there are five workers to every one person over the age of 65. However, by the year 2051 this will fall to just 2.3 people for every one person over...

Pension Terminology

Risk Level – Each fund has a risk level attached to it which is a guide how risky the fund is. A higher number means a higher risk fund and a lower number means a lower risk fund. A higher risk fund will give you more potential for investment growth. The scale is generally 1 to 7.

Tax Relief – Is a tax deduction on your pension contributions. It is an incentive to encourage people to save into their pensions.

Contributions – These are the payments you pay into the pensions fund they can be made in lump sums or recurring monthly premiums.

What is a Personal Pension?

A Personal Pension is an account you can use to save for your retirement. You can make lump or recurring payments into a Personal Pension, and these are usually tax deductible. A Personal Pension can be invested into different types of funds with different risk levels (higher risk means a better chance of high returns but a higher chance of losing your money and lower risk means lower...