Time not timing

Jeremy Tauri.

It seems that everywhere you look, there is someone making a prediction.

There's the Reserve Bank economists predicting the outlook for inflation, the currency, interest rates. Then there's the bank economists trying to predict what the Reserve Bank's next move will be.

Where does that leave the average "mum and dad" investor or mortgage-holder? Do you wait a couple of months before fixing your mortgage to try to lock in the lowest rate possible? Do you hold on until the end of the year before putting your house on the market, to try to squeeze every last dollar out of the property boom?

The best thing you can do is to check out the predictions - then put them to one side.

Controversial economist Shamubeel Eaqub has data that shows how often even the experts get it wrong.

No one has a reliable crystal ball and every prediction is only an educated guess, at best. The only thing that really matters is your own personal situation.

Can you afford the interest rates on offer, and do they seem like a good deal? Great, sign them up. Does your family need to move? Get on to that.

When it comes to most financial decisions, it's time, not timing, that makes all the difference. Even if you bought a house at the peak of the last property boom, and saw prices dwindle shortly thereafter, if you held on another 10 years, you'd be in a better position now.

Greed and fear are investors' worst enemies. If you're too greedy and try to time your transactions to extract maximum value, you create a big opportunity for failure. Likewise, if you're too fearful and hold back from a great opportunity. Assess the information, review the past, do your own research and reflect on the numbers to act on decisions. If you win you'll be happy, if you lose you'll be wise.

- Jeremy Tauri is an associate at Plus Chartered Accountants