Worst Timing?

My partner, Jimmy Burns, bought some Nvidia stock one trading day before it lost $600 billion in market cap.  Yep, the largest market cap loss in the history of the United States.

So, I proceeded to make a good-natured jab at Jimmy by writing a cute little message on top of one of the Behavior Gap illustrations adorning the walls of our office.  See below:

For those of you who don’t know Jimmy, you might think he is some sort of retail investor rookie.  Far from it.  He is a pro. He is a Certified Financial Planner® and a Certified Public Accountant.  He has made clients many millions of dollars, enabling them to realize their goals.  He is, in my humble opinion, one of the very best in the personal financial planning business.  He is also human.  As such, he fell into a timing trap that is bound to affect any long-term investor from time to time.  

Timing the Market?

Nobody really knows what the stock and bond markets are going to do in the short term.  Markets are unpredictable and volatile.  If you get a nice gain after buying an asset, good for you.  It’s called luck!  The same is true when buying an asset that loses money immediately.   It’s luck, or more accurately, bad luck!  Neither short term result probably matters in the long run so long as you purchased a good asset to begin with.

But, what happens if you are consistently the worst market timer with the worst luck?  It’s not bad at all as it turns out! Time may just heals all wounds.  See below:

The next time Jimmy buys at the top of the market, he can rest well. 😉