Timing the Market Is a Trap: What Buying an Office in March 2020 Taught Us

By Henry Single & Damian Healey, hosts of Pivot to Profit

Everyone says it, and almost nobody follows it: it’s time in the market, not timing the market, that builds wealth. The logic sounds obvious until you actually try to put it into practice, and then it turns out to be one of the hardest things to act on, especially when the headlines are screaming at you to wait.

Buying into a crash

Henry bought an office in March 2020, the exact week the share market was tanking. He had exposure to shares at the time too, and around 30 per cent of that portfolio disappeared in the same week he was preparing to settle on the office. Everyone around him was saying it was “the death of the office,” that nothing would be the same again.

You couldn’t give office space away at the time. I got an absolutely cracking deal, and it turned out to be one of the most profitable investments I’ve made.

He held that asset through a period when the cash rate was at emergency settings, his interest rate sat around 2.5 per cent, and the property was throwing off roughly a thousand dollars a week in cash flow. He has since sold it, profitably.

Why you can never actually identify the bottom

Here’s the practical problem with waiting for the bottom of the market: even if you could somehow predict it perfectly, you’d only be choosing from whatever stock happens to be listed during that narrow window. If you own a quality property, the bottom of the market is the last time you’d choose to sell it. So buyers trying to time the bottom end up choosing from the weakest available stock, in the smallest window, and if they miss it, they’re straight back into the upswing.

We’ve run the numbers on this exact question before: will waiting for lower interest rates actually cost you more?

And you only ever get confirmation that the market has turned once you’re standing in an auction room with fifty other people bidding on the same property you want. By then, it’s too late. That’s not a signal; that’s the market already moving without you.

The question that actually matters

Forget trying to pick the bottom. Ask instead: do I believe prices will be higher in ten years than they are today? If the answer is yes, and you can afford to buy now, the timing question mostly answers itself.

This topic is unpacked in full, with the real numbers and the back-and-forth, on Episode 2 of Pivot to Profit. Give it a listen for the full conversation.