happypunter,You've hit the nail squarely on the head: The...

happypunter,

You've hit the nail squarely on the head: The opportunity cost of getting the "timing" of markets wrong is many times greater than the benefits of being uninvested when "the market" undergoes a 5%, 10% correction, or even a 20% "crash".

I suspect a lot of people are still scarred and brutalised by the events of the GFC, and its lingering memory is still inducing what I call "Emotional Investing" today.

It is a pity because, as has been demonstrated over and over and over, there are businesses whose financial performance, and their ability to increase in intrinsic value, is completely independent of economic conditions or stock market cycles (or, for that matter, interest rates, exchange rates, weather patterns, wars, oil prices, steel prices, political changes, the Chinese economy, Eurozone debt problems, or whatever...)

And if one simply bought these good quality businesses, it would completely eliminate the constant stress of anguishing over whether "the market" (whatever that might be) is heading up, down, sideways, left or right.

I recall, too many times to recount, how over the past 2 decades, all manner of financial market commentators such as economists, equity strategists, fund managers, financial journalists and private investors have adopted investment positions based on the expectation that "cataclysmic" events like the 1992/1993 synchronised global recession, the Asian Financial Crisis, the Argentinian debt default, the Dot Com Crash, the 2003 global recession, and the much-vaunted GFC, are due to be repeated.

And yet, through all these major "calamities" there are companies that have still happily grown sales, profits and dividends as if nothing whatsoever had happened.

To demonstrate my argument, assume you had a wealthy relative who was the founder and sole shareholder of a company like WOW, WES, CBA, TLS, AZJ or RHC.

Now assume your wealthy relative passed away and you inherited one these wonderful businesses from him.

You surely wouldn't sell the business because you were "worried about the market", and you might be able to buy it back a few per cent cheaper at some stage in the near future.

For you'd know that every year your company would be generating more revenues, earning more profits, and paying higher dividends, so what did it matter what the value of a total arbitrary basket of other random companies (aka "the market") did in the intervening period?

Yet that's exactly what people do every day.

I recall debate over the past 12 to 24 months about the merits of shorting Australian banks because property prices were going to collapse and/or the Eurozone was about to blow up.

30%-plus subsequent capital growth and 10% in dividends (tax effective) from bank shares, and yet the same property market "risks" and "Euro-paranoia" remain.

Instead of owning good-quality businesses, people seem to want to own squiggles on a chart.

For the life of me I can't understand why one would choose to stress and anguish on an hourly and a daily basis about the unpredictable mood of markets, and where they may or may not be heading this week, this month, or this quarter, when you have the option to simply buy great companies and merely monitor at their financial results twice a year to make sure that the superior financial performance and intrinsic value growth is being perpetuated.

And then happily go back to lying on the beach, awaiting the next - and higher - dividend cheque hitting the bank account.

Someone, I don't recall who, once called it "getting paid for having a poo".

Now, I wonder if Syria will be the start of World War Three?