The perfect time doesn’t exist

Mith every further attempt that the Dax takes to a new high, but also during recovery phases such as after the slump in March 2020, many beginners wonder whether this would not be a good time to get into the stock market themselves. Often stock market wisdom and family members are consulted and price charts are diligently studied. But all of this is just an illusion: there is no right time to start. Professionals know that the best time to invest is always. However, behind the desire of many non-shareholders to catch the perfect time is an idea that can actually have an impact on long-term success.

“Waiting for a certain point in time falls under the discipline of market timing,” says Andreas Hackethal. He is Professor of Finance at the House of Finance at the Goethe University in Frankfurt and heads the Household Finance department at the Leibniz Institute SAFE. “The idea is that you can catch any signal or use certain rules and technical analyzes to determine the right time to board,” he explains, adding: “That is not possible.” If there were such simple rules for getting on board, everyone would Investors act accordingly and a self-fulfilling prophecy would emerge. “Many investors try to beat the market with good timing, and because so many, especially large institutional providers, try it with their enormous sums of money, it doesn’t work,” says Dirk Rathjen, co-director at the Institute for Asset Development (IVA) . Ultimately, it just depends on when enough large providers believe that the market is turning and move their billions accordingly.

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