Why trying to time the market doesn’t work
Having the value of your property investment double has almost nothing to do with buying at the right time and everything to do with actually buying.
“So, is now a good time to buy?”
If I had a dollar for every time I’ve been asked that question, I’d have enough money to add a small island to my property portfolio.
Yes, it’s a common question, but let’s be real - it’s a silly one. The truth is that markets cycle. I mean, if they were entirely predictable, everyone would be rich.
Time in the market beats timing the market - no contest. Every successful investor, from Warren Buffett to that random guy who amassed his worth by selling NFTs, has said something like this.
Let me tell you why. One of the biggest mistakes investors make is obsessing over timing the market, hoping to buy just before an upswing. The reality is that this strategy rarely works.
Why? Because most people underestimate compound growth - the real secret to wealth. The longer you hold your investments, the more compound growth works in your favour. It’s like planting a tree and watching it become a forest.
How long does it take property to double?
Consider this: An asset worth $100,000 growing at 7 per cent per year will double every 10 years. This is the “Rule of 72”; divide 72 by the annual rate of return, and the result gives you the number of years it will take for your investment to double.
But here’s the kicker: that doubling effect gets exponentially more powerful as time goes on.
The first 10 years? Your $100,000 turns into $200,000.
The second 10 years? $200,000 grows to $400,000.
In the third 10 years? $400,000 becomes $800,000.
The money multiplies like rabbits - and that’s why time is a property investor’s best friend.
Just this month, my wife and I bought our ninth investment property. Did we buy it because it was the perfect time? Nope. We bought it because we could afford it - the bank lent us the money, and we were confident we could handle the cash flow.
We’re in this for the long haul. We’re chasing time in the market, not the ‘perfect timing’. We plan to hold these properties for 20 years-plus. The sooner we start, the sooner we get to year 20. Simple as that.
Show me someone who’s built wealth by flipping properties, and I’ll show you five who’ve done it by buying and holding.
Now, don’t get me wrong. This doesn’t mean you should buy just anywhere, at any time without consideration.
Markets do move in cycles, and there are dozens of micro-markets within the Australian property landscape. If you’re buying, it makes sense to direct your investment toward areas that are more likely to appreciate in the short to medium term.
But that’s a whole other thing - from trying to time the market and holding off on buying when you can afford it. That’s not strategy; it’s procrastination.
And trust me, it’s a foolish approach.
