YOU perhaps have, many times, heard the witty saying: “It is not your timing of the market but your time in the market.” The saying speaks to two different types of investors and you will have to determine which one you are. For investors with a long-term perspective and who are conservative, your time in the market will be more important. But for those investors who get excited about accumulating wealth, timing is everything!

Investors who spend time in the market and who have a long-term perspective tend to buy and hold securities. They look for the companies with the greatest growth prospects, purchase when the price is low and hold those securities until the companies have grown to maturity. In this way the investment grows as the company grows.

However, those investors who are interested in accumulating wealth will tend to trade their securities on a more regular basis. They are constantly looking for bargains so they will seek out companies which have good fundamentals, purchase the security when the price is low and sell as soon as the security has met their required rate of return.

In the past two years, a number of investors took the opportunity to make very good returns on their investments, some up to 20 per cent per annum, by just trading bonds. The recent crisis in the US and the Eurozone presented a number of opportunities for investors to increase their wealth in the recent past, and still does. The price of some of the largest and financially strongest companies in these economies was severely battered in the crisis. Some of these prices have recovered to the extent of giving investors double digit returns on their investments. Some of these securities were like junk, nobody would “touch them with a ten-foot pole.”

However, investors who successfully timed the market reaped heavily on pay day. Take for instance the ACAFP 8.375 per cent 10/29/2049 bond. This bond moved from a price of 77.50 on January 23 to a price of 102 on October 26, 2012. One year later, on October 25, 2013 the price has climbed to a whopping 112.80. This of course addresses only capital gains. But do remember that a coupon of 8.375 per cent per annum is paid every six months. Another more spectacular performance came from Lloyds 12 per cent 12/29/2049 whose price moved from 90.88 on January 23, 2012 to 111 on October 26, 2012 and soared to 133 on October 25, 2013. BAC 10.20 per cent 10/15/2015 also had its own success story where the price moved from 110 on January 23, 2012 to 118 on October 26, 2012 and to 114 on October 25, 2013. Although this price is still below its one-year high, it still is above the 110 level it achieved in January 2012.

The bonds referred to above are all from the Eurozone or from the US; and these are only a few of the many success stories in a global economy which came close to the brink of bankruptcy.

That, friends, is what I mean by “timing the market.” Investors do not have to get greedy; just set yourselves realistic goals for your investment returns and go after them. Some investors, of course, will need help to do so, and to those investors I say, your financial advisor is waiting. Happy investing.

Pamela Lewis is vice president, investments and client services at Sterling Asset Management Ltd. Sterling provides financial and advisory services to the corporate, individual and institutional investor. Feedback: If you wish to have Sterling address your investment questions in upcoming articles, please e-mail us at: info@sterlingasset.net.jm or visit our website at www.sterling.com.jm