Author Topic: Sometimes its hard not to try to time the market....  (Read 1816 times)

MrGville

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Sometimes its hard not to try to time the market....
« on: March 09, 2017, 12:29:31 PM »
I've given people advice on this forum many times regarding market timing, but its something that I think about every time I am making an investment decision.  For instance, I have enough cash now to fund my IRA for 2017, but as I was logging into my account, I was thinking, "should I wait a few months and see what happens?  Or wait until next year to make my contribution for 2017?"  I guess it's human nature to think like that.  I just tell myself that I likely will not touch this money for over 30 years, so I'm going to make my contribution today. 

Anyone else have these "internal battles" or experience some self-doubt even though you know what the logical thing to do is?

tarheeldan

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Re: Sometimes its hard not to try to time the market....
« Reply #1 on: March 09, 2017, 12:40:38 PM »
To combat this, I make everything possible automatic :-)

FLBiker

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Re: Sometimes its hard not to try to time the market....
« Reply #2 on: March 09, 2017, 12:50:56 PM »
To combat this, I make everything possible automatic :-)

Me too.  At this point, I really never think about where the market is at.

MrGville

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Re: Sometimes its hard not to try to time the market....
« Reply #3 on: March 09, 2017, 12:57:34 PM »
To combat this, I make everything possible automatic :-)

Me too.  At this point, I really never think about where the market is at.

Great point.  I had everything set up to be automatic, and then when I got married about 6 months ago I turned off my automatic contributions as we combined finances.  Need to turn those automatic contributions back on!

AccidentalMiser

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Re: Sometimes its hard not to try to time the market....
« Reply #4 on: March 09, 2017, 01:09:46 PM »
To combat this, I make everything possible automatic :-)

Me too.  At this point, I really never think about where the market is at.

Great point.  I had everything set up to be automatic, and then when I got married about 6 months ago I turned off my automatic contributions as we combined finances.  Need to turn those automatic contributions back on!

Yes, that would be wise.

This reminds me of a story.  I used to play quite a bit of poker, just nickel, dime, quarter stuff, but I was pretty fair at it.  Once, a guy I used to play with asked me if I ever regretted throwing in a hand which would later have turned out to be a winner.

My answer to this was (and is) that there is one and only one correct decision to make when looking at the cards in your hand and the cards on the table.  If your cost to stay in exceeds your expected return over time, then you must fold every time or you will lose in the end.  By contrast, your cost to stay in is lower than your expected return over time, then you must stay in or the same thing will happen.

It's the same with the market.  You must be invested to get market returns over time. 

Retire-Canada

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Re: Sometimes its hard not to try to time the market....
« Reply #5 on: March 09, 2017, 01:35:15 PM »
Anyone else have these "internal battles" or experience some self-doubt even though you know what the logical thing to do is?

No. I don't hold cash. If I have cash it gets invested. I am adding every month so I never feel like this particular lump of cash is special in any way.

dleavitt

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Re: Sometimes its hard not to try to time the market....
« Reply #6 on: March 09, 2017, 04:18:34 PM »
Sorta related, I've been tempted to try and time the housing market.  We only purchased it 3 years ago, but it has appreciated so much in this current market that we could use the resulting cash to completely pay off our remaining student loans (roughly $50k).

If I already had another place to live I'd do it in a heartbeat, but the same forces that work for me in the sale would work against me in the purchase/renting side of things.

Lanthiriel

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Re: Sometimes its hard not to try to time the market....
« Reply #7 on: March 09, 2017, 10:45:18 PM »
I just posted a similar question in the Investing section (guess I shoulda come here first). I'm trying to decide whether to max out my 2017 IRA or set up automatic monthly payments to max out by December. I'm leaning toward monthly to spread out the risk, which also seems like what others are suggesting.

bugbaby

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Re: Sometimes its hard not to try to time the market....
« Reply #8 on: March 09, 2017, 11:07:28 PM »
'Buy low sell high' implies some degree of market timing...For instance if the market crashes it's time to buy or hold, not sell.  If market is wildly high beyond sane P-E ratios it's not unreasonable to sell some stocks & buy bonds.. That's the idea of re-balancing periodically.

Also you can contribute to your IRA (tax savings) and invest conservatively rather than not contribute or keep it in cash losing to inflation.

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Linea_Norway

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Re: Sometimes its hard not to try to time the market....
« Reply #9 on: March 10, 2017, 02:13:08 AM »
Some months ago when I bought a bunch of index fund stock I bought at a top. Really stupid timing. I regret not being more aware of buying at low earlier.
Now I have all my savings in stock and need to wait every month until I have new leftover money on my back account. Most index funds are all on high. But I still keep buying them. I check the funds and try to buy those that have a little flattening at the moment of purchase. Alternatively I would have to put it in cash waiting for the next low, but all that time the money is hardly making any rent. So far, all my stocks are in plus.

patchyfacialhair

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Re: Sometimes its hard not to try to time the market....
« Reply #10 on: March 10, 2017, 08:05:02 AM »
A thought that often goes overlooked: if the market is not consistently at an all time high, then that means that it may be stagnant or losing money.

While the market may "feel" overvalued, keep in mind that most of the time historically, the market is at an all time high.

MrGville

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Re: Sometimes its hard not to try to time the market....
« Reply #11 on: March 10, 2017, 08:10:14 AM »
A thought that often goes overlooked: if the market is not consistently at an all time high, then that means that it may be stagnant or losing money.

While the market may "feel" overvalued, keep in mind that most of the time historically, the market is at an all time high.

This is excellent.  Definitely something that goes overlooked.  We want the market to continue being at all time highs, its not something to be worried about (as many people are), it means that the market is continuing to grow.