Too scared to invest.. Market timing

[Severinooh]

Hey, someone talked about market timing, probably 5 years away from ER, had a great year. Would this be an opportunity to get out of the market and wait for the next big dip. Granted may miss a couple of good days attempting to time but after the year we have had could it really be that bad a move?

[donheff]

I am with the stable AA folks. That helped me weather the big downturns with not much more than a yawn. I fiddle around at the edges by timing my liquidation events for annual expenses and occasionally buy up a bit of equities but I always hover near the 60/40 level.

[John Galt III]

Took the plunge today since the market looks like it will end down a bit today. Moved out of a stagnant bond fund into a midcap fund. It has huge perf numbers something like 29%, 20%, and 19% for 1, 3, 5 year.

I notice whenever I buy a highly performing fund like this, I have to take profits when I can (if it goes up 20 % or more) because the thing will crash after a year or 2 and I'll have a loss. hmmm. Maybe instead of just taking a profit, I should just dump the whole thing after it goes up 20 %, and get into something else.

[Animorph]

Quote:

Originally Posted by John Galt III Took the plunge today since the market looks like it will end down a bit today. Moved out of a stagnant bond fund into a midcap fund. It has huge perf numbers something like 29%, 20%, and 19% for 1, 3, 5 year. I notice whenever I buy a highly performing fund like this, I have to take profits when I can (if it goes up 20 % or more) because the thing will crash after a year or 2 and I'll have a loss. hmmm. Maybe instead of just taking a profit, I should just dump the whole thing after it goes up 20 %, and get into something else.

Performance chase much? I'm happy to buy funds that are not having their best years.

[NW-Bound]

Quote:

Originally Posted by Animorph Performance chase much? I'm happy to buy funds that are not having their best years.

Or better yet, find out why these funds are down relative to the hot ones. Perhaps the downers are too concentrated in certain sectors.

Then, one can buy just a bit of those sectors, after some study of course.

[Chuckanut]

Quote:

Originally Posted by runchman Smartest thing I ever did years ago, for my peace of mind and investment performance, was determining the asset allocation I'm comfortable with, setting my portfolio to that, and then completely ignoring the market. No more decision making, no more worry, no more 'nuthin except rebalancing once in a blue moon.

+1

What runchman said.

[Options]

Quote:

Originally Posted by runchman Smartest thing I ever did years ago, for my peace of mind and investment performance, was determining the asset allocation I'm comfortable with, setting my portfolio to that, and then completely ignoring the market. No more decision making, no more worry, no more 'nuthin except rebalancing once in a blue moon.

+1

I have much better things to do with my life than try to time the market. Books from Bogleheads, Bogle, Bernstein, Malkiel, Tobias, et. al, taught me to write down my investment philosophy and never deviate for any reason. Ever. Doesn't mean I don't review my holdings, I'm just not influenced by current events.

Only current exception is VG FP is recommending I diversity about 10% of my 50/50 portf. into int'l bonds. I am taking his advice as about 1/3 of bond mkt. is int'l. Other than this change, and rebalancing at year end, I stay the course and always ignore what the market does in the short term.

[haha]

Quote:

Originally Posted by John Galt III Took the plunge today since the market looks like it will end down a bit today. Moved out of a stagnant bond fund into a midcap fund.

In today's world a stagnant bond fund is not half bad. What was your expectation on purchase, that the relevant interest rate go to zero?

I feel, with no proof that would convince anyone here, that before too awfully long we will look back and wish we owned more stagnant investments. Stagnant means that at least it did not go down.

Ha

[Gunny]

Quote:

Originally Posted by jetpack Earlier this year, many were predicting the market would be flat or decline this year. Despite that, the s&p is now up 23% for the year & 87% over the last 5 years. I now wish that I had been fully invested, but no, I've held significant & growing cash reserves (20% or 10 years of spending) With this market outperforming long term 10% average, it certainly seems likely it's going to correct again. I'd like to stop worrying and just balance my portfolio, but the market is driving me crazy! What are you all doing with new cash? How much do trust the general advice.

My strategy is monthly buys (dollar coast averaging) into growth stock and index funds. All with TSP and Vanguard(
Roth IRA). Keeps expenses low and investing steady.

[Midpack]

Quote:

Originally Posted by jetpack Earlier this year, many were predicting the market would be flat or decline this year. Despite that, the s&p is now up 23% for the year & 87% over the last 5 years.

I'm another who maintains an AA of low expense index funds through thick and thin. I'm interested in long term returns, I really don't pay attention to short term market volatility. I was fully invested (all equity for the first two events, though not recommended) before, during and after 1987, 2000-02 and 2008-09, and had excellent results.

Most people here don't even read, much less listen to many - many can't reliably predict what will happen short term. You might reconsider listening to "many."

[eta2020]

Quote:

Originally Posted by Midpack I'm another who maintains an AA of low expense index funds through thick and thin. I'm interested in long term returns, I really don't pay attention to short term market volatility. I was fully invested before, during and after 1987, 2000-02 and 2008, and had excellent results. Most people here don't even read, much less listen to many - many can't predict what will happen short term. You might reconsider listening to "many."

+1
https://personal.vanguard.com/pdf/s358.pdf

Even Vanguard dose not know what will happen.

[nash031]

Still buying periodically (2x per month), but the lump sum bonuses I've gotten are sitting in a money market waiting for an opportune moment (correction). I have a number in mind - we didn't hit it during the last debt ceiling fiasco, but I'm about 99% sure we will hit it someday.

[growing_older]

I find it far too hard to guess correctly. Sometimes I was right, sometimes I was wrong. On average, I do better when I ignore my guess and just invest whenever I have money available to do so.

[Apex1]

Quote:

Originally Posted by Midpack I was fully invested (all equity for the first two events, though not recommended) before, during and after 1987, 2000-02 and 2008-09, and had excellent results.

Midpack, just to clarify, are you saying you were 100% equities and no fixed income through these events?

[Midpack]

Quote:

Originally Posted by Midpack I was fully invested (all equity for the first two events, though not recommended) before, during and after 1987, 2000-02 and 2008-09, and had excellent results. Quote: Originally Posted by Apex1 Midpack, just to clarify, are you saying you were 100% equities and no fixed income through these events?

Again I am not recommending same for others but as I noted, I was for the first two corrections, but not 2008-09 (older now, less need to take as much risk). I was richly rewarded for NOT trying to time the market.

Systematically DCA'ing in (vs lump sum) is OK for someone who is really nervous, but there is no way to predict which route will be better in any given set of circumstances.

Investing is all about long term returns IMO, not the inevitable and unpredictable short term gyrations. No one can reliably predict when to get out, or when to get back in - no one. I've watched others try and fail over and over...

[Apex1]

Quote:

Originally Posted by Midpack Again I am not recommending same for others but as I noted, I was for the first two corrections, but not 2008-09 (older now, less need to take as much risk). I was richly rewarded for NOT trying to time the market. Systematically DCA'ing in (vs lump sum) is OK for someone who is really nervous, but there is no way to predict which route will be better in any given set of circumstances. Investing is all about long term returns IMO, not the inevitable and unpredictable short term gyrations. No one can reliably predict when to get out, or when to get back in - no one. I've watched others try and fail over and over...

Ok I see. If this is a case of "do as I say, not as I do" at least wrt to the AA part, that works for me and thx for explaining

[aja8888]

Quote:

Originally Posted by Midpack Investing is all about long term returns IMO, not the inevitable and unpredictable short term gyrations. No one can reliably predict when to get out, or when to get back in - no one. I've watched others try and fail over and over...

Agreed, but that is only if you are "long term". When you hit an age that I just had a birthday for, and some friends and family are passing away in front of you...investing is about capital preservation and developing an income stream from these investments. Plus, it's prudent to keep you eye on the ball.

I am heavily into stock index funds (mostly ETF's) and a couple of very short bond funds (plus 10% cash). I watch the market and current events daily and stay nimble enough to roll into cash, even if its temporary. Next year I am faced with taking an RMD from my IRA which I did not convert to a ROTH. I suppose if I wanted to be 100% safe (maybe 99.5%), I could put it all into cash and make 1%, but I like 4% better.

[Midpack]

Quote:

Originally Posted by Apex1 Ok I see. If this is a case of "do as I say, not as I do" at least wrt to the AA part, that works for me and thx for explaining

Not that simple, but thanks for the snarky reply...

[Apex1]

Quote:

Originally Posted by Midpack Not that simple, but thanks for the snarky reply...

my ill attempt at humor there..... wasn't really my intention but realize how that came off now. my bad.

[Mulligan]

Quote:

Originally Posted by Midpack Not that simple, but thanks for the snarky reply...

Maybe I am a below average reader for comprehension, but for me anyways, I did not take your post as "Do as I say, not do as I do" in any way possible. But, FWIW, I subscribe to your style of investing, also.