Secular Markets

[W2R]

Quote:

Originally Posted by REWahoo Yep. Much wiser to do what many here do and rely on the tried-and-true, proven-beyond-any-shadow-of-doubt "Wheeee" cycle.

That would be pretty superstitious, too! Personally I don't base my investing decisions on that, either. I just enjoy and appreciate the market surges as much as the doomsayers do the crashes. I prefer to just diversify and rebalance to maintain my asset allocation, and that approach doesn't really rely upon pseudo-analyses of market patterns.

[NW-Bound]

Not superstitious at all. It is a balancing method using fellow investor's sentiment to "sell high, and buy low later". Highly scientific!

The "whee balancing" method can be viewed as another contrarian approach. The question is why one cannot use his own emotions, and to overcome them in order to buy when the situation feels desperate, and to sell when one feels elated.

I guess it is easier when one observes the emotion of someone else. It is not unlike doctors who cannot diagnose themselves, and need outside info.

[HFWR]

Quote:

Originally Posted by W2R That would be pretty superstitious, too!

Wouldn't that be "very superstitious"?

I wonder if Stevie sees any patterns?

Ba dum tss

- YouTube

[W2R]

Quote:

Originally Posted by HFWR Wouldn't that be "very superstitious"? I wonder if Stevie sees any patterns? Ba dum tss - YouTube

Touche!

[Mulligan]

Quote:

Originally Posted by Tyro My recollection of that contest (or perhaps it was criticisms of the contest) is that shooting darts works during bull markets, but the pros allegedly did better during flat and bear markets, which I spoze may be part of the argument in favor of managed funds. Regardless, what really counts (to buy & holders) is overall longterm performance through all types of markets, where the index funds apparently outperform managed funds. Tyro

I remember back in the 90's the contest where monkeys throwing the darts were wearing out the pros picks. Glad I chose a career field where I wasn't endanger of getting outperformed by a monkey!

[Texas Proud]

Interesting clip where they say you lose if you try and time the market (on average)....

Market Timing Will Cost You Big Time Says Dalbar

I did not see the actual study...

[audreyh1]

Quote:

Originally Posted by Tyro I've heard it argued that for the last decade we've been in a secular (prolonged) bear market (adjusted for inflation, and with intermittent rallies) that may continue for another 3-8 years (or more).* *Not saying that I agree with that argument; I'm reading articles on both sides. Tyro

Just because we've been in a secular bear doesn't mean we stay down >20% the whole time. We've had two major recoveries. My net worth (retired)has kept up with inflation. This is quite different than selling off 50% like in 2008/9 and STAYING THERE. Quite a difference between a secular bear cycle (no overall equity market advances) and a bear market (down >20% from recent peak).

[Packman]

Quote:

Originally Posted by Tyro Did the book say anything about the presidential cycle, which, IIRC, states the last two years of a president's term are, on average, more profitable than the first two years (exceptions like the '80s noted)?

Yes, the book did have a chapter on the presidential cycles. Here is a recap of the Dow for all four years of this cycle:

1st year - up 86%
2nd year - up 187%
3rd year - up 470%
4th year - up 255%

It went on to state that you could combine the presidental cycles with the best six month strategy which would create only 2 buying periods in the four year cycle and 2 sellling periods. The rest are holds.

[Texas Proud]

Quote:

Originally Posted by Packman Yes, the book did have a chapter on the presidential cycles. Here is a recap of the Dow for all four years of this cycle: 1st year - up 86% 2nd year - up 187% 3rd year - up 470% 4th year - up 255% It went on to state that you could combine the presidental cycles with the best six month strategy which would create only 2 buying periods in the four year cycle and 2 sellling periods. The rest are holds.

That last sentence makes no sense to me.... if the market is up on average using the six month cycle, you could care less about the presidents cycle as you would be making money anyhow... maybe less money than the last two years of a presidents term...

So why throw away an earning opportunity just because there are a few years when it is even better.... it is not like an either this or that.... you can do both....

[Packman]

The author of the book isn't saying the six month cycle works in every annual situation. So I think he says (historically/statistically speaking) that you can improve the results by combining the presidential year cycle and the six month cycle.

Or maybe he's just trying to sell books!

[Texas Proud]

Quote:

Originally Posted by Packman The author of the book isn't saying the six month cycle works in every annual situation. So I think he says (historically/statistically speaking) that you can improve the results by combining the presidential year cycle and the six month cycle. Or maybe he's just trying to sell books!

But that theory can be tested and determined which one is better!!!

IOW, if keeping your money in cash for a few years in order to try and grab 6 months of gains for two of every 4 years beats out doing the 6 month cycle.... is it not a better strategy


And why they are at it, why not see if just picking up that third year by itself is even better.... heck, that would make it way more easy to time the market.... just buy every 4th year for 6 months and sit around the rest of the time... easy peasy....

[Tyro]

Quote:

Originally Posted by Mulligan I remember back in the 90's the contest where monkeys throwing the darts were wearing out the pros picks. Glad I chose a career field where I wasn't endanger of getting outperformed by a monkey!

“We've all heard that a million monkeys banging on a million typewriters will eventually reproduce the entire works of Shakespeare. Now, thanks to the Internet, we know this is not true.” ~ Robert Wilensky

[Tyro]

Quote:

Originally Posted by audreyh1 Quite a difference between a secular bear cycle (no overall equity market advances) and a bear market (down >20% from recent peak).

That's not how I read & understood it, but I've misunderstood things I've read before.

Market trend - Wikipedia, the free encyclopedia

[Tyro]

Quote:

Originally Posted by Texas Proud That last sentence makes no sense to me.... if the market is up on average using the six month cycle, you could care less about the presidents cycle as you would be making money anyhow... maybe less money than the last two years of a presidents term... So why throw away an earning opportunity just because there are a few years when it is even better.... it is not like an either this or that.... you can do both....

I wish I could find the web page I read that contained the presidential cycle data. Part of it was that, the first two years of a presidential cycle also included more down cycles, which, in theory, would mostly be avoided by sitting out those first two years.

There were, and will always be, exceptions. The actual data showed that too. Like the six month cycles, it supposedly works over long periods of time, and unlike buy & hold, avoids many of the down cycles.

Things like this are interesting (for me) to read about, so I may give the book a read, but I've never subscribed to them, nor do I plan to.

[NW-Bound]

Quote:

Originally Posted by Tyro “We've all heard that a million monkeys banging on a million typewriters will eventually reproduce the entire works of Shakespeare. Now, thanks to the Internet, we know this is not true.” ~ Robert Wilensky

Not millions but billions!

But look at all the porn in both literal and figurative senses that is posted. That must count for something. That should keep people looking, er, reading. Who reads Shakespeare anymore?

[HFWR]

Quote:

Originally Posted by NW-Bound Not millions but billions! But look at all the porn in both literal and figurative senses that is posted. That must count for something. That should keep people looking, er, reading. Who reads Shakespeare anymore?

"The lady poster doth protest too much, methinks."

Bill Shakespeare