Market Timing Schmarket Timing

[tuixiu]

Quote:

Originally Posted by LOL! Thanks for the heads-up on capitulation. It takes some guts to do that AND to post about it.

Heck yeah man, I at least wait to see if I was right to decide whether to post about it later.

[BTravlin]

Quote:

Originally Posted by NW-Bound Eh, if one feels lucky he can go on margin. A true market timer would not let shortage of cash keep him from trading. Just sayin'...

True but my aversion to risk won't allow such shenanigans.

[NW-Bound]

I have gone on margin before, but for only about 2% of portfolio. I usually keep 20-25% in cash, and no less than 15%, but much of it is in I-bond which I do not want to cash out, or in 401k stable value funds, and occasionally I want to make short-term trades in my after-tax accounts where I may not have that much free cash.

So, in 2010 during a market downturn I went on margin for 2%, while I still had net cash. It was intended for a short-term move, but then it stretched out to a few months. The margin interest that they charged was fairly high at 8 or 9%. So, for a 3 month duration it cut quite a bit into my profit.

I have not done that since, but will not rule out such option if the market tumbles hard.

[Bikerdude]

I recall there have been several studies that show maintaining at least 25% equities has less risk (over time) than being all fixed income. The other problem with market timing is that you have to be right twice. Are you felling lucky? Well are ya!

[Lsbcal]

There are so many flavors of market timing. To name a few:
1) Following moving averages (200 day, 150 day, 50 day, exponential moving averages, etc).
2) Hunches based on light analysis
3) Bets based on thorough single company analysis
4) Timing overall allocation based on some fundamental and technical indicators

Then there are different time periods to hold the equities. Seconds, days, months, years.

I do not think all of these are equally smart or equally stupid. Some of them are definitely gambling. A *very* few of them interest me.

There have been some long term winners doing market timing. I'm thinking of unpublished ones that occasionally surface in magazine articles. Thee is never enough information to quite understand the methods and to be honest the success is not fully documented. An example is private money run by Edward Thorp (math professor at UC Irvine, wrote Beat the Dealer about card counting for poker in the 1960's).

For some market timing is like a beautiful blond female mirage.

[robnplunder]

Quote:

Originally Posted by REWahoo +1 No one here would ever behave like this guy...

With trading account, I tend to get in at 7, and get out at 18 or 19. Don't make much money that way but I am not very greedy when I gamble.

[Lsbcal]

Quote:

Originally Posted by robnplunder With trading account, I tend to get in at 7, and get out at 18 or 19. Don't make much money that way but I am not very greedy when I gamble.

Hmmm...if you can let me know how you get a 157% gain I would like to be "not very greedy" too!

[robnplunder]

Quote:

Originally Posted by Lsbcal Hmmm...if you can let me know how you get a 157% gain I would like to be "not very greedy" too!

I wish. I was referring to Rewahoo's chart "points."

[audreyh1]

DH was so happy to get the grants finished from our donor-advised fund late this week, and I'm looking at the Thursday market drop and thinking "ouch!"

But accounts are still nicely up since the start of the year, so it really doesn't matter.

[audreyh1]

Quote:

Originally Posted by BTravlin Not market timing but I did get lucky and replenish my cash position close to the peak.

How do you know it was "the peak"?

[wingfooted]

Buying the dips has been the right move every time for the last three years.

It will work until it doesn't.


Sent from my iPad using Early Retirement Forum

[BTravlin]

Quote:

Originally Posted by audreyh1 How do you know it was "the peak"?

Maybe an intermittent peak?

[Mulligan]

There are so many flavors of market timing. To name a few:

1) Following moving averages (200 day, 150 day, 50 day, exponential moving averages, etc).

2) Hunches based on light analysis

Lsb, In reality, I think all of my trades have been #2. Though in MY mind at the moment of execution, I have convinced myself it was detailed, researched based intensive analysis.




Sent from my iPad using Tapatalk

[Gumby]

I'll admit to market timing. I had some cash I had been waiting to put to work, so I bought $125k of SDY at 11:45 am(EST) yesterday. We'll see how that works out.

[eta2020]

Quote:

Originally Posted by Gumby I'll admit to market timing. I had some cash I had been waiting to put to work, so I bought $125k of SDY at 11:45 am(EST) yesterday. We'll see how that works out.

Were you deciding between several different ETFs?
Why SDY?

[Gumby]

SDY has more of a "value" orientation than a straight SPY investment. I've favored that end of the spectrum since the day I read Benjamin Graham's The Intelligent Investor for the first time. DIV would have been another alternative, but I already have a large amount of that.

[target2019]

Quote:

Originally Posted by bob boag It would have been a brutal hit but my assets are indeed nearly 100% in IRAs.

My opinion is that your AA must have been wrong, or you would have made a smaller tactical move.

Given the week's market moves, and usual summer doldrums, you actually are ahead, now. Do you have a plan for getting back to a different AA?

We discussed, and moved, about 2% small/midcap to stable value last week.

[REWahoo]

With all the noise about a pending major market correction, here's a dissenting opinion:

History says don’t count on a big correction anytime soon

Quote:

Chadha says big corrections are unusual mid-cycle, which is where he reckons we are right now. Instead, three-fourths of such corrections happen near recessions (measured as one year on either side) — and almost never occur when the trend in the unemployment rate is down, Chadha writes. Chadha also downplays the scope of the current rally when stacked up versus other mid-cycle runs. While the average rally between corrections has been 43% over 1 1/2 years, Chadha says the averages are skewed by short rallies interrupted by frequent corrections around crises and recessions. A better comparison are the “long business cycles” of the 1960s, 1980s, 1990s and 2000s, he says, when the stock-market rallies averaged 110% and lasted four years.

Knowing my market timing track record, I'd be sitting on the sidelines in cash when the downturn suddenly reversed itself, leaving me on the sidelines while the market continued to climb.

Then again, the OP may be the smartest guy in the room...

[eta2020]

Quote:

Originally Posted by Gumby SDY has more of a "value" orientation than a straight SPY investment. I've favored that end of the spectrum since the day I read Benjamin Graham's The Intelligent Investor for the first time. DIV would have been another alternative, but I already have a large amount of that.

Even here at least 50% of people don't follow Graham's "The Intelligent Investor"

[robnplunder]

Wheeeeeeee ... bring on a market correction please. Let's get it over with and take the DOW industry average to 25000 . I am tired of OMY. Retire early, I will.