The Money Adventures of Otis and Bob: Timing the Market

Episode One: Investors need patience and nerves of steel to benefit from markets

Ruth Saldanha 5 February, 2019 | 6:00AM
Facebook Twitter LinkedIn



If the video does not automatically play on Chrome or Safari, please click pause, and then click play again - you can do this by clicking anywhere on the video.

Bob : Good morning Otis.

Otis : Good morning Bob.

Bob : Do you know how much you would have today, you invested $1 way back in 1956.

Otis : I don’t know Bob, how much?

Bob : Your loonie would have become worth almost $200.

Otis : $200.

Bob : Look at this chart. See, investments increase with time.

Otis : But Bob this isn’t a straight line.

Bob : Yeah, unfortunately on the way to your $200 the TSX took some pretty massive hits. Don't worry Otis at some point the drop stops, fall reverses slowly but surely, you will see value recover and even surpass previous highs.

Otis : I know this one. Buy when the market is low, and sell when it’s high, right?

Bob : Wrong.

Otis : Wrong?

Bob : It's tricky to try and call the bottom or the peak of the market. You need a mix of knowledge and a great deal of luck. But I have the secret.

Otis : You do.

Bob : I do, I really do.

Otis : What is it?

Bob : What all successful investors have? Patience.

Otis : Really, patience. That’s your secret.

Bob : Yes, Otis patience. Let me explain. The longest period where value was lower at the end than at the beginning lasted 8 years and 8 months.

Otis : 8 years and 8 months.

Bob : Yep, started with the dotcom bust, followed by a recovery, and then we got hit with the global financial crisis. But the very next month the market returned with 7.8%, undoing the previous losses.

Otis : I get it. When a market goes through a downturn, instead of reacting to it you should ride it out, patience.

Bob : Patience.

Otis : Patience.

Bob : Patience. And nerves of steel.

Otis : Nerves of what.

Bob : Of steel. You know strong, durable, tough. When things get bad you must have strong nerves to ride out a downturn.

Otis : Strong like a diamond.

Bob : Yes, like a diamond. Or like the dyneema, you know dyneema.

Otis : I don’t think you are saying that right.

Bob : D-y-n-e-e-m-a, dyneema.

Otis : I got one buckypaper.

Bob : Buckypaper.

Otis : I know with the word paper in it how can it be strong.

Bob : How about graphine? Nerves like graphine. I like that.

Facebook Twitter LinkedIn

About Author

Ruth Saldanha

Ruth Saldanha  is Editorial Manager at Follow her on Twitter @KarishmaRuth.


© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy       Disclosures        Accessibility