ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Does this count?
Pfau, Wade D., Long-Term Investors and Valuation-Based Asset Allocation (November 1, 2011). http://dx.doi.org/10.2139/ssrn.2544636
The abstract:
Does this count? Market timing based on CAPE ratios. A few different flavor are offered (all in/all out, or more moderate shifting of allocations based on equity valuations).
Pfau, Wade D., Long-Term Investors and Valuation-Based Asset Allocation (November 1, 2011).
https://mpra.ub.uni-muenchen.de/35006/2/MPRA_paper_35006.pdf
The abstract:
It seems that Kitces likes the Tactical Allocation label better than "market timing." Same thing, IMO. His blog entry discussing the work he and Pfau published.
Thanks for those links. I only had time to skim, but it does seem like he demonstrated an advantage to a value based decision on market timing. Maybe rather slight (but not insignificant) in terms of $, but it also was at a lower volatility, so that sure adds to it.
I think the key there is, when people talk about market timing, I can see where it would be hard to pick a re-entry price lower than the exit point - they can get left behind. But if what I gathered in my quick skim was close, you don't need to be so concerned about getting 'locked out', at some point valuations will return and define a re-entry point. If, on average that point wasn't higher than having the money in bonds, (and sometimes would be lower), then on average I guess you could do well.
It still seems a bit scary to me to assume some method based on past results will work better than B&H going forward, but I will give this a closer look.
-ERD50