A Fool And His Money

[boont]

I keep reading how impossible it is to time the market. Most advisors say,"The smartest investors in history have not been able to successfully time the markets." Well, I'm far from a smart investor, by a long shot.

The chief complaint seems to be that, "you will never know when to get back in, even if you do get out at the correct time."

In my case I got out of the market in late December 1999 when the S&P was about 1360 or so. I got out because I was going to retire in 2002 and I thought the market was ridiculously high. I also thought it was full of crooks, but that is another story. We will see if I was right about that last part.

Today the S&P is about 985. Now, I have to figure out when to get back in. It seems to me that I can go in almost any day I choose with a 365 point margin of error.

As my old boss used to say, "How hard it that to figure out"?

b.

 

[harley]

When you get lucky getting out at the right time, it's much easier to get back in at a good time. Nobody ever said you can't time the market once. It's doing it with enough consistancy to beat the market that's hard.

Go ahead, get back in. All in now, or DCA for a while. As you said, you've done the hard part already. I doubt you'll be able to pick the bottom exactly, so take advantage of your luck/good fortune and you'll be better off than many.

The question is what will happen next. If you wait for the bottom and something huge happens going upwards, you'll probably miss a lot of it. Good luck.

 

[boont]

Bottom

I really never try and shoot for the top or the bottom. Just anywhere close is good enough for me.

As for doing this another time, I don't plan on that. I only get one good idea every few years anyway.

The saying in real estate is, "the profit is made in the purchase, not the sale." If you buy at the right price, it's hard to go wrong in selling.

For stocks, I would reverse that, "the profit is made in the sale, not the purchase." If you sell at the right price, it's hard to go too wrong on buying in again.

b.

 

[novaman]

yeah a friend of mine got antsy and went all into cash at the beginning of 2006. He then saw all the money everyone else was making and decided to get back in around October 2007.....that should have been my signal to get out!

 

[Animorph]

You missed the big peak in 2000 and getting back in in early 2003 and back out in 2007. I think I made something like 20% annualized for 2003-2007. You're sort of lucky to have a second chance now. 2008 Certainly would have been difficult to see from 1999. Doesn't sound like great timing to me.

 

[boont]

Big Peak

It wasn't great timing, that's the point.

I did miss the big peak. Then again, I don't think it is possible to get every last dollar either up or down. But why try? There is still plenty to be made.

Just saying, despite what many say, if you've been out of the market for a long time, like I have, it doesn't take too much skill you just wander back in now.

Will I ever hit the very bottom? No. But, to me, it doesn't matter much. Hard to miss at these levels.

b.

 

[audreyh1]

Just wait for 800. If it doesn't get that low - oh well, never mind.

Audrey