Why shooting the moon is so difficult
If you ever tried to play the computer card game hearts you would no doubt have encountered how difficult it is to get zero score while the other players all bust. You have to be able to know at all times how many cards have already been played and also who still holds what cards. All your opponents would want to dump the queen of spades on you while you would want them to end up with her.
When considering investments many people also want to shoot the moon or put differently, shoot the lights out! While investment markets are advancing almost all investors seems to be aggressive. This might entail constantly switching to better funds trying to obtain the best possible returns compared to your friends or peers.
Now we know that markets never go up in a straight line. We had arguably the best of economic times during the past six years. Although danger signs appeared on the horizon, many investors chose to ignore them. Instead of constantly trying to outsmart investment markets by regularly switching investments, a better approach would be to calculate your need or requirement at the time you need your investment to mature. This could be upon retirement or some pre-determined event.
You then build a diversified portfolio (cash, equities, bonds, gilts and property) that will give you the required return over your pre-determined period. There would then seldom be disappointments along the way because you are constantly monitoring and adjusting your asset allocation, not timing the market. This might not sound exciting at first but as you go along and witness your steady progress you will soon realise the value of such an approach.