Thanks for the reply with info, some interesting things to think about...
You are correct...the exit and re-entry points are difficult to determine. However, after a 20% drop which signal a bear market, then a decision should be made whether to stay or exit. ...
Ahh, so it
is that easy (for me)! I'll stay!
A bit more seriously, certainly one could do well by sidestepping a downturn, but those darn exit and re-entry points are a tough one to deal with.
... There is no objective system except a subjective one. In my specific situation, I do not need a re-entry point since I want to buy property at this time.
... .
OK, but being subjective makes it a very tough thing to test for, or for me to build any confidence in. I just can't bring myself to making a big financial decision by "reading the tea leaves". If you can, and are successful, then that's great (for you).
... Here is an interesting video from Billionaire Jeffrey Gundlach who discusses some of these factors:
...
I do not know how many Jeffery Gundlach's haters are out there so it looks like I am going to find out. It does not matter since I doing this for entertainment.
I do agree with Jeffery that taxes are needed to address the national debt. However, history has shown that LBJ had refused to raise taxes to pay for the Vietnam War. The results: Interest and inflation reached double digit. Are you old enough to remember that? This is why I am looking at property assets rather than stock market assets.
Don't really know anything about this fellow, I'll watch later, but I'll assume he has some good points to make. But as always, I'll question if they are actionable. I also don't consider valid criticism as "hating", but we will see if any comes up.
LBJ left office in 1969, big inflation was in the 80's, I'm not sure that's the cause/effect? Regardless, a buy & hold still did well over most time frames. And they would need to identify and move to something else that was better for it to matter in any meaningful way.
As far as a sideways move into real estate, I have no insight, no opinion.
But I guess it all comes around to, if you feel you are capable of this subjective analysis that can lead to reliably beating the market, others must be capable as well. So why don't we see mutual funds consistently beating the market? I know, some will say these winners will keep it to themselves, but assuming it is a modest advantage (but significant over time with compounding), they probably could make more, and take less risk, by taking an annual % of other people's money. I would think they would do that.
Hedge funds try, I haven't seen good evidence that they reliably succeed (for the clients).
-ERD50