Back in the 2015/16 Premier League football season Leicester City were able to achieve something quite astonishing.

This was a time when the league was dominated by big teams such as Manchester United, Arsenal, Liverpool, Chelsea, Manchester City and Tottenham. Teams that had a much larger following, were worth huge amounts of money and spent large amounts buying the world’s best players.

It wasn’t one of the ‘big six’ that won the title that season though. It was Leicester.

It wasn’t all plain sailing for Leicester though. They didn’t have star players at the time and they didn’t spend much on transfers. At the start of the season the odds of them winning the title were 50001. They had only just avoided relegation from the league the year before.

What Leicester did have though was a system which they stuck to through thick and thin.

They knew they weren’t the most technically gifted team. They couldn’t out skill their opponents. What they did instead was create an incredible team that worked hard for each other. They were solid and hard to beat, ending the season with the secondbest defensive record in the league.

It’s these traits that can help you become a successful investor.

You don’t need to be clever and understand everything that is going on in the stock markets. You just need to stick to a plan and remain solid. Don’t let anyone breach your defences, get past you and convince you otherwise.

The big brands of the investment industry and the financial press will try to convince you that they know best. They’ll scare you when markets are tumbling, encouraging you to sell and will make you think you are missing out when markets are rising, encouraging you to buy.

They’ll make you believe that timing the market is key to success and quite frankly they are right. Timing the market, as in buying when stock prices are low and selling when stock prices are high will make you a hugely successful investor. The problem is, it’s incredibly hard to do. So much so that no one has successfully mastered it yet.

In fact, if you think about it, convincing you to sell when markets are falling and buy when markets are rising is the complete opposite of timing the market correctly anyway. So the big brands can’t even get the message right.

You don’t need to worry about any of that. Even if you were the worst investor in the world and invested your money at the wrong time every time you can still be successful.

The following example shows two investors, the lucky investor and the unlucky investor.

They both invest $2,000 every year for 20 years into a fund that tracks the US S&P 500 index. We will use this index as it contains the biggest companies on the US stock market and is a proxy for the global market.

The lucky investor invests their $2,000 every year at the lowest market price of that year, perfect timing. The unlucky investor invests their $2,000 every year at the highest market price of that year, just before a fall, the worst timing.

If we apply this to the period 20032022 the results are as follows.

Even being the unluckiest investor in the world only results in a small difference in the final outcome.

You would still have made $72,292 on your $40,000 total investment. A 180% return overall. Nearly doubling your money twice.

Repeating this process over rolling 20year periods going back to 1926, the results are nearly always the same.

The key here is to just invest. Keep investing in a global equity fund, stay invested and you will most likely be rewarded over the long term no matter what happens in the short term.

Stick to a system and remain solid. Your defence is the fact you keep buying and holding. Not timing. You’re not trying to score the perfect goal, you’re trying to stop the opposition from beating you.

Legendary football manager Sir Alex Ferguson has been credited with saying, “Attack wins you games, defence wins you titles.”

#timingthemarket #investmenttiming #successfulinvestor