Author Topic: Finding it hard to avoid market timing  (Read 2028 times)

Ron Scott

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Finding it hard to avoid market timing
« on: July 03, 2022, 08:22:57 AM »
I’ve never been much on selling stocks and I’m not a rebalancer. But I’m finding it hard to avoid buying a chuck at this time—or maybe waiting just a little longer. I have no idea what the future will bring.

I just like the “buy low and don’t sell” approach.


Sibley

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Re: Finding it hard to avoid market timing
« Reply #1 on: July 03, 2022, 08:34:08 AM »
If you have money to invest, then buy. If you don't, then don't. If this is a predictable pattern, then make it automatic if possible.

Dicey

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Re: Finding it hard to avoid market timing
« Reply #2 on: July 03, 2022, 11:53:23 AM »
Nothing wrong with doubling down when the market dips. Anything that discourages people from panic selling is good, IMO. We just spent our ready cash on a condo. Not being able to load up on stocks while they're on sale is killing us. Killing us, I tell you! Argh!!

Mr. Green

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Re: Finding it hard to avoid market timing
« Reply #3 on: July 03, 2022, 04:09:04 PM »
Sure dollar cost averaging may make you the most money long term but you certainly won't lose money buying the dips. It certainly feels good psychologically!

solon

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Re: Finding it hard to avoid market timing
« Reply #4 on: July 03, 2022, 04:12:33 PM »
The only difference between what you're proposing and what most of us do, is that we invest every time we get paid. You happen to have a chunk of money on the sidelines, so invest it now, and then invest every time you get paid. Whether the market is up or down is irrelevant.

Ron Scott

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Re: Finding it hard to avoid market timing
« Reply #5 on: July 04, 2022, 05:08:57 AM »
The only difference between what you're proposing and what most of us do, is that we invest every time we get paid. You happen to have a chunk of money on the sidelines, so invest it now, and then invest every time you get paid. Whether the market is up or down is irrelevant.

Been retired since ‘17. Got an unusual number of munis retiring in the taxable account this quarter and I mostly just spend interest and dividends so I thought I’d move the bond proceeds to VTI.

When you’re working though and in the accumulation game you’re right—just keep investing on automatic.

clarkfan1979

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Re: Finding it hard to avoid market timing
« Reply #6 on: July 04, 2022, 10:34:23 AM »
The only difference between what you're proposing and what most of us do, is that we invest every time we get paid. You happen to have a chunk of money on the sidelines, so invest it now, and then invest every time you get paid. Whether the market is up or down is irrelevant.

Been retired since ‘17. Got an unusual number of munis retiring in the taxable account this quarter and I mostly just spend interest and dividends so I thought I’d move the bond proceeds to VTI.

When you’re working though and in the accumulation game you’re right—just keep investing on automatic.

There is an episode on the "Money Guy" show in which a person stock piles cash and waits for a dip. They buy at the absolute bottom every 8-10 years and time it perfectly. Their return is lower than the person who dollar cost averaged. That episode really helped me avoid trying to time the market.

With that said, I do have a system that works for me. I'm typically 90% stocks and 10% bonds. After a 20% bear market dip, I switch to 100% stocks. When the market recovers, I go back to 90/10. It works for me psychologically.

 


ATtiny85

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Re: Finding it hard to avoid market timing
« Reply #7 on: July 04, 2022, 10:56:34 AM »
I’ll never bat an eye over someone who buys more equities when the market goes down, assuming it’s not a major change. Sort of like clarkfan said.

GuitarStv

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Re: Finding it hard to avoid market timing
« Reply #8 on: July 04, 2022, 11:18:01 AM »
No market timing!  You should just be rebalancing.  When markets are down, rebalancing will require that you buy stocks on sale.  When markets are up, rebalancing will require that you take profit from your stocks.


There's nothing wrong with buying stuff when the market is down, but if you're doing it right you should always have most of your money invested . . . so there's just not going to be much opportunity to do a big buy in these times.

chasingsnow

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Re: Finding it hard to avoid market timing
« Reply #9 on: July 04, 2022, 12:48:26 PM »
PTF, this thread has super helpful advice

RyanAtTanagra

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Re: Finding it hard to avoid market timing
« Reply #10 on: July 05, 2022, 12:32:30 PM »
Sure dollar cost averaging may make you the most money long term but you certainly won't lose money buying the dips. It certainly feels good psychologically!

I'm pro dollar cost averaging for the psychological aspects, but statistically its best to put whatever you have in the market as soon as you can, because 60% of the time the market goes up, so odds are you'll come out ahead over DCA.  But if DCA helps people start getting into the market sooner, it wins over hesitation.

ChpBstrd

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Re: Finding it hard to avoid market timing
« Reply #11 on: July 05, 2022, 03:57:14 PM »
The only difference between what you're proposing and what most of us do, is that we invest every time we get paid. You happen to have a chunk of money on the sidelines, so invest it now, and then invest every time you get paid. Whether the market is up or down is irrelevant.

Been retired since ‘17. Got an unusual number of munis retiring in the taxable account this quarter and I mostly just spend interest and dividends so I thought I’d move the bond proceeds to VTI.

When you’re working though and in the accumulation game you’re right—just keep investing on automatic.

Question for @Ron Scott ...

Would you describe your thoughts as:
(a) Stocks are cheap because they've gone down 20%,
(b) Stocks are cheap because the P/E ratio, P/S ratio, P/FCF ratio, etc. are relatively low, OR
(c) I've already avoided the Sequence Of Returns Risk episode I was hedging for, so why not go long now, OR
(d) Lower valuations and higher interest rates justify an adjustment to my asset allocation?

2sk22

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Re: Finding it hard to avoid market timing
« Reply #12 on: July 06, 2022, 06:38:09 AM »
I would not go quite so far as to call it market timing but I did recently increased the amount of our automated monthly post-tax purchase of index funds.

Since we always maxed out our respective 401Ks We have been buying the S&P index for our taxable brokerage account once a month since the 1990s. Back then we started at $500 per month. In 2009 when the market crashed, I increased it to $1000 per month. Then as our income increased, I kept increasing the amount. In general, I use market dips as a reason to increase the amount.

ATtiny85

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Re: Finding it hard to avoid market timing
« Reply #13 on: July 06, 2022, 06:51:33 AM »
I would not go quite so far as to call it market timing but I did recently increased the amount of our automated monthly post-tax purchase of index funds.

Since we always maxed out our respective 401Ks We have been buying the S&P index for our taxable brokerage account once a month since the 1990s. Back then we started at $500 per month. In 2009 when the market crashed, I increased it to $1000 per month. Then as our income increased, I kept increasing the amount. In general, I use market dips as a reason to increase the amount.

I like the mentality! Figure a way to tighten up a bit more when things go down, and it is so sweet to watch that help the recovery. I started with $150 back in 1994. We haven’t increased since 2020 our monthly amount, but we squeeze more out of our yearly bonus the last couple years as pay increases have accelerated when we max 401k, leaving more cash accumulation from October on.

dignam

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Re: Finding it hard to avoid market timing
« Reply #14 on: July 06, 2022, 06:55:29 AM »
Already maxing 401k/IRA contribs, but yesterday I decided to rebalance a little bit.  Sold some of my SPY shares and bought some tech stocks that have taken a (more significant) beating this year.