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Old 09-03-2011, 06:37 PM   #21
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Fine, have a consistently applied strategy. But you said something significantly different -- that if you market time at all, you must be confident you'll always get the timing just right:
Then, since no rational person could ever know for sure that he knows precisely when the market will turn up or down, then no one should ever try to improve on a random or fixed-interval strategy of when to invest. This goes far beyond the advice that one should follow a strategy consistently.
I didn't say anything about a system that you'll always get the timing right. But that since you are confident in your system, (why would someone invest in a system they doubt?) then go for it.

You're reading more into the words "just right" than needed. "Just right" is a warm and fuzzy. Not a 100% certainty, beyond reasonable doubt. There's no need to read more into it than needed.

If you expect a "perfect time" you'd we waiting a long long time.

Actually, when is the right time is the very argument against market timing. You need to know when to get in and out...a lot easier said than done.

Hope it makes sense to you now.
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Old 09-03-2011, 10:27 PM   #22
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Hope it makes sense to you now.
Best not to bank on it.
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Old 09-03-2011, 11:47 PM   #23
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Hmmm.

There are certainly times when one asset class is more attractive than others. For example, if government bonds are at 0%, it is probably not a good time to buy them. Interest rates can't go below zero and when they do go up, the price of the bond will go down and you will have negative capital gains and no dividends. That is pretty much where we are today.

I have chosen an asset allocation and rebalance every year or two. However, my dividends go into a money market fund and sit until I decide what to do. This year, I will probably buy on weakness equities that pay dividends. BP looks really good to me right now.

I think this is different from market-timing, which I interpret as making a big bet on which way things are going to go in the short term. The OP is obviously thinking about doing exactly that.

I wind up making only small bets. Like Uncle Mick's testosterone fund. The big pot is still mostly index funds and I am happy with that.

If I had a big wad of cash for some reason and wanted to invest for the long term, I would still choose an asset allocation and commit it all at once. I would not make a big bet on one asset class or one stock. I ain't smart enough to hit a home run with one stock or one asset class.

Note: I am still in the accumulation phase.
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Old 09-03-2011, 11:52 PM   #24
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In connection with that, Jeremy Siegel thinks that stocks are cheap today:
Jeremy Siegel: Stocks Are Cheap! (And Getting Cheaper) | Daily Ticker - Yahoo! Finance
Specifically, dividend-producing stocks.
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Old 09-04-2011, 05:06 AM   #25
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When is it ever clear that we are heading for a recession? Right now I'm hearing numbers like 40-50% chance. Must be nice to come up with numbers like that where you cant be wrong. Its like the weather man saying we have a 50% chance of rain. If it rains, he says "I told you so" and if it doesn't he says "there was only a 50% chance".

By the time the numbers come in that say we are in a recession, we have already been in one for months and the market anticipated it and has already dropped significantly.

Good point.


Right now the only part that seems to be clear is that DC is at a stalemate. The lack of cooperation could lead to a politically induced recession.

In late July... CEOs pleaded for cooperation in DC. In August, Zero net jobs.

Downward adjustment in growth projections.

Then there is the market volatility (investors trying to make up their mind about the near-term future).

Tough to ignore all of that. At the very least some people are thinking it is much more likely.
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Old 09-04-2011, 09:49 AM   #26
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Originally Posted by Ed_The_Gypsy View Post
In connection with that, Jeremy Siegel thinks that stocks are cheap today:
Jeremy Siegel: Stocks Are Cheap! (And Getting Cheaper) | Daily Ticker - Yahoo! Finance
Specifically, dividend-producing stocks.
May be, but then my man jeremy has never seen a stock that he didn't think was cheap.

Ha
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Old 09-04-2011, 12:15 PM   #27
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When is it ever clear that we are heading for a recession? Right now I'm hearing numbers like 40-50% chance. Must be nice to come up with numbers like that where you cant be wrong. Its like the weather man saying we have a 50% chance of rain. If it rains, he says "I told you so" and if it doesn't he says "there was only a 50% chance".
I'm not convinced it's going to happen either. I agree with what I just read in "The Most Important Thing" by Howard Marks:

Quote:
"The pendulum cannot continue to swing toward an extreme, or reside at an extreme, forever (although when it's positioned at its greatest extreme, people increasingly describe that as having become a permanent condition). Like a pendulum, the swing of investor psychology toward an extreme causes energy to build up that eventually will contribute to the swing back in the other direction."
Your weatherman analogy is interesting. My understanding is that this is what the weatherman is actually saying: "In the past, when the conditions were the way they are now, 50% of the time we had rain." It's an important distinction. I think economic cycles are harder to predict than the weather, because of the strong influence of psychological and groupthink factors (amplified by the 24/7 media).
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Old 09-04-2011, 12:44 PM   #28
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Naturally, we love the unjustified fears of a recession, to drive the marks into selling their stocks to us at low prices. And if there actually is a recession, well, try not to think about that.
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Old 09-05-2011, 02:56 PM   #29
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Thanks for the feedback, discussion and debate. In the end, I guess it always boils down to one's comfort level. I think that I'd have a fair amount of company when I say that I don't know where the market's going. That said, develop a plan...and stick to it. Thanks.
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Old 09-05-2011, 06:27 PM   #30
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That makes no sense to me. Who is "they"? Do you have a reference?
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Old 09-07-2011, 06:22 PM   #31
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My thoughts exactly. I have never changed my plans in the last 20 years (still zero stock).
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In the end, I guess it always boils down to one's comfort level. I think that I'd have a fair amount of company when I say that I don't know where the market's going. That said, develop a plan...and stick to it. Thanks.
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