Thought Leadership

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Many investors are familiar with the adage, “it’s about time in the markets, not timing the markets.” This holds true when attempting to call the top, find the bottom, and juggle the volatility in-between. A study by FMRCo[1] shows that missing out on only the 5 best days, while otherwise being fully invested in the S&P500 from 1980 – 2018, would result in a 35% drop to the total return. While determining what constitutes those best ‘days’ we must look beyond 9:30am – 4:00pm EST. Although investors can mainly see price movements during these hours, price discovery never sleeps.

Consider the example of a publicly traded company with the ticker ABC. On May 4th, ABC closed at a price of $100. Shortly after the close, management released earnings for the quarter – which far surpassed analysts estimates. This is the type of news that, all else being equal, drives up price of a security. After the release, analysts on both sides of the desk work to determine the new value of the stock given this information. By the morning of May 5th, the street has settled on an appropriate value of $105 per share, reflected by what is seen on the order boards. At the 9:30am open, ABC trades at $105 – a 5% increase from the day before. For an investor hoping to not miss out on a great day, placing an order for ABC at 9:30am is already too late.

Virtually all earnings releases, and most conference calls discussing them, are held outside market hours. As this is the case, it makes sense for the new information to be accounted for and priced in during those periods too. This demonstrates how futile trying to time the market, especially by day trading, really is. If most gains are made when the market is closed, investors are hard done by to deploy significant amounts of cash to capture them.

Investors have the best opportunity to capture gains, both when the market is opened and closed, by maintaining a disciplined and long-term approach. At Bristol Gate, our focus on sustainable, high dividend growth ensures we maintain a long-term orientation and helps keep us on track in achieving our investment goals during volatile periods such as the one we are currently experiencing.

[1] Source: FMRCo, Asset Allocation Research Team, as of January 1, 2019

Important Disclosures

There is a risk of loss inherent in any investment; past performance is not indicative of future results. Prospective and existing investors in Bristol Gate’s pooled funds or ETF funds should refer to the fund’s offering documents which outline the risk factors associated with a decision to invest. Separately managed account clients should refer to disclosure documents provided which outline risks of investing. Pursuant to SEC regulations, a description of risks associated with Bristol Gate’s strategies is also contained in Bristol Gate’s Form ADV Part 2A located at

This piece is presented for illustrative and discussion purposes only. It should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities and it does not consider unique objectives, constraints, or financial needs of the individual. Under no circumstances does this piece suggest that you should time the market in any way or make investment decisions based on the content. Investors are advised that their investments are not guaranteed, their values change frequently, and past performance may not be repeated. References to specific securities are presented to illustrate the application of our investment philosophy only, do not represent all of the securities purchased, sold or recommended for the portfolio, it should not be assumed that investments in the securities identified were or will be profitable and should not be considered recommendations by Bristol Gate Capital Partners Inc. A full list of security holdings is available upon request. For more information contact Bristol Gate Capital Partners Inc. directly. The information contained in this piece is the opinion of Bristol Gate Capital Partners Inc. and/or its employees as of the date of the piece and is subject to change without notice. Every effort has been made to ensure accuracy in this piece at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and Bristol Gate Capital Partners Inc. accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. We strongly recommend you consult with a financial advisor prior to making any investment decisions. Please refer to the Legal section of Bristol Gate’s website for additional information at

A Note About Forward-Looking Statements

This report may contain forward-looking statements including, but not limited to, statements about the Bristol Gate strategies, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events and conditions or include words such as “may”, “could”, “would”, “should”, “expect”, “anticipate”, “intend”, “plan”, “believe”, “estimate” and similar forward-looking expressions or negative versions thereof.

These forward-looking statements are subject to various risks, uncertainties and assumptions about the investment strategies, capital markets and economic factors, which could cause actual financial performance and expectations to differ materially from the anticipated performance or other expectations expressed. Economic factors include, but are not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. Readers are cautioned not to place undue reliance on forward-looking statements and consider the above-mentioned factors and other factors carefully before making any investment decisions. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith. Forward-looking statements are not guarantees of future performance, and actual results could differ materially from those expressed or implied in any forward-looking statements. Bristol Gate Capital Partners Inc. has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, except as required by securities legislation.


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