Author Topic: I'm an expert at market timing!  (Read 14257 times)

ender

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Re: I'm an expert at market timing!
« Reply #50 on: February 06, 2016, 07:47:27 AM »
a fact:
95% of the time, mkts are recovering from previous loses and only spend 5% making new highs.

citation needed

Retire-Canada

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Re: I'm an expert at market timing!
« Reply #51 on: February 06, 2016, 07:53:27 AM »
a fact:
95% of the time, mkts are recovering from previous loses and only spend 5% making new highs.

citation needed



Orange = total returns
Blue = just price

ender

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Re: I'm an expert at market timing!
« Reply #52 on: February 06, 2016, 08:01:03 AM »
a fact:
95% of the time, mkts are recovering from previous loses and only spend 5% making new highs.

citation needed



Orange = total returns
Blue = just price

... this seems to 100% refute Cougar's claim (?). And probably would even more compellingly do so if it included dividend reinvestment.

I am assuming you are posting this to refute Cougar -- not provide evidence for that claim?

Retire-Canada

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Re: I'm an expert at market timing!
« Reply #53 on: February 06, 2016, 08:10:18 AM »
a fact:
95% of the time, mkts are recovering from previous loses and only spend 5% making new highs.

citation needed



Orange = total returns
Blue = just price

... this seems to 100% refute Cougar's claim (?). And probably would even more compellingly do so if it included dividend reinvestment.

I am assuming you are posting this to refute Cougar -- not provide evidence for that claim?

My goal is neither to refute or support her claim, but to look at the facts as we have them. That's why I did not comment on the chart.

I agree I don't see what she is saying reflected in this data.

Bearded Man

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Re: I'm an expert at market timing!
« Reply #54 on: February 06, 2016, 08:48:30 AM »
I'm maxing my 401k and IRA as well as HSA to get a 28% return on my money in tax savings. I plan on being in a lower tax rate in retirement and not even touching the 401k, it's just a back up plan.

faramund

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Re: I'm an expert at market timing!
« Reply #55 on: February 06, 2016, 03:06:33 PM »

well, it looks like most responses here really have no idea,

yes, you cannot time the market; but when the entire world economy is slowing; why you are risking your financial market invested assets; I do not know.

yes, do keep putting money away every paycheck, month or however you add regularly but if you have a substantial amount, like over even 50k; limiting mkt exposure when macro economis say the economy is slowing or enterting a recession; I do not understand; you should be separating them into mostly cash.money markets/bonds with little stock/equity exposure.

so, you sit out this year until you see reports that wages are increasing, retail sales are increasing and mortage loan defaults are increasing and housing prices are rising and you lost ? mybe 10% of the bottom, it beats the ride down imo.

please think about it as time lost for capital appreciation. if you got out at 10% down and the avg recession is 28% down; you will have over 15% more on the ride back up than you would hade lost if you had taken the ride down that most everyone else does and you will have to take the additional time to get back to even.

a fact:
95% of the time, mkts are recovering from previous loses and only spend 5% making new highs.

how much do you wish to give bacj to wait and recover ? my post is coming up shortly to give advice on where we are in the mkt.
I believe the soft version of the efficient market hypothesis. Which is the one that has actually been tested, i.e. markets immediately reflect new information, i.e. market price is the sum of known knowledge.

So at the moment, there is some risk of a slowdown, you're not the only one who thinks that. Prices have already dropped because of that. Some people think it could be a severe slowdown - that's already in there. So is that some people think the economy will grow or even boom.

So who knows, maybe the market is reflecting a probability of 10% severe slowdown, 20% slowdown, 60% stable, 10% boom.

You can only "beat the market" if you're understanding, is better than it. So are you so sure, you're understanding of the probability of a slowdown is so much better than what the market's is.

I would have been more impressed, if about 6 months ago, you posted - markets are going to fall - sell. That would have been a clear case of realizing the market was incorrect, and taking advantage of that. Especially, in retrospect you would have been proved correct.

In summary, I am much more interested in hearing people who are contrary to the general market sense. If they make a good argument, I'll remember them, and if it turns out, I'll pay them more attention in future.

But people who after the market has boomed, say its a good time to buy, or after its crashed, say its a good time to sell. I don't really pay much attention to. By the time they say such things, its too late, and on historical evidence, following what they say, is usually the OPPOSITE of the best cause of action.

homestead neohio

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Re: I'm an expert at market timing!
« Reply #56 on: February 08, 2016, 01:14:49 PM »
Head's up! I'll be buying ETFs ~5 Feb 2016. So you would be wise to invest the week before or the week after. There is bound to be a significant dip. ;)
Ha. Replying just so I can see if you're "right" (in a wrong way) this time too.
I was planning to buy roughly at the same date but now you got the superstitious guy in me wondering. I'll buy on Feb 7th

I know this is going to be true of any continuing downward trending market, but funny to see these types of "warnings" and intentional delays in purchasing.  Wololo, you should have waited another day!  Nice additional downward action today...

I recently made some changes from high ER mutual funds to vanguard ETFs.  I theoretically don't believe in trying to time the market, but I did hold the cash between the sale and purchases for between 1 and 3 weeks.  I set buy limit prices at lows of mid-January and bought ETF shares at a few % discount over their prices at the time I sold the mutual funds.  That was as much as I could stomach being out of the market.  I freely admit I have no idea which way it is going, and when market prices went up as oil went from $26 to $34, I wondered if I was missing a reversal.  The last two limits hit today and I'm back to fully invested, which is a relief.  It was an emotional roller coaster trying to eek out that extra 1-2% discount, and I wondered if I was doing the "right" thing.   I was gambling and got lucky.  It was a big chunk of my 'stache and trimming losses 1-2% means something, but it was also at a higher risk of remaining un-invested while a rally leaves my limit orders in the dust.  Most of these ETFs have continued to drop and I could have purchased more at lower prices, but no way to know that!  I'm glad I wasn't on the sidelines.  Not sure I would that again.

Like many here in the accumulation phase, I look at the dips as buying opportunities.  I try to scrounge up extra cash by delaying non-essential purchases, selling stuff I don't need, or increasing my 401k contribution rate.  I fully funded my 2015 and 2016 IRA in January.  I'm not going to be accessing ANY of this money for >6 years and the bulk of this money will not be needed for decades.  Long term, failing to invest is what will prevent gains that enable me to FIRE.  Investing at the highs, holding through the lows will not be a problem.  The reality is I'm buying at every price along the continuum.

I track both investable asset net worth and savings rate monthly.  When net worth decreases month over month despite investing more, I try to focus on savings rate.