I'm now a market timer??

[ArkTinkerer]

Funds were moving from my 401K to IRA when the latest downturn hit and I had them cashed out for the transfer. I now find I'm reluctant to reinvest right away. Prefer to sit it out this week.

Trying to decide on getting back in by investing a bit every day, every week, or just setting the allocations and being done with it...

 

[truenorth418]

I find myself in a similar position. I intend to buy a little on the dips over the next few weeks until the spare cash is fully invested again.


Sent from my iPhone using Early Retirement Forum

 

[mrfeh]

Are you looking for an answer to your post title?

If you are, the answer is "Yes".

 

[razztazz]

Everybody is a market timer. Even Dollar Cost Averagers. Even Buy-and-hold rebalancers.
All depends on how you want to define timing.

 

[Animorph]

If you can now buy more shares than you sold, you've won! I'd be happy with that and buy back in now. If the market had gained while I was out then I'd be tempted to wait for it to go back down. But waiting for it to go down is probably less than 50/50 probability unless you want to be really patient.

 

[Closet_Gamer]

I'm in a similar position as I've been fortunate to have deep in the money stock options vesting which I use to general decent size piles of cash. Pure "stay invested" theory would probably say that since it was effectively invested in the stock underlying the option, I should have immediately rolled it all right back into the market at my target AA. I couldn't do it. I'm bleeding it in over 12 months...but I buy religiously every month. (I actually cheated a bit and bought an extra month during one of the swoons.)

 

[NW-Bound]

Robert Shiller repeatedly said in recent interviews that the market was fully valued and that the chance for a big drop was high. So, he cut back his equity AA, although he did not say what it was.

If a Nobel laureate is timing the market using a quantitative measure like P/E, is he still a "dirty market timer"?

What do the Bogleheads say? Oh never mind.

 

[MichaelB]

Robert Shiller repeatedly said in recent interviews that the market was fully valued and that the chance for a big drop was high. So, he cut back his equity AA, although he did not say what it was.

If a Nobel laureate is timing the market using a quantitative measure like P/E, is he still a "dirty market timer"?

Shiller typically discusses valuation but rarely comments on the timing or likelihood of a decline. Does anyone have a link to this interview?

 

[NW-Bound]

In the latest edition of his book "Irrational Exuberance" (3rd ed, 2015), Shiller warned that the market was overextended. And one can do a quick search on the Web to see that he has been telling investors to be cautious since.

A note: Shiller repeatedly says in his book as well as in person that the timing of such a decline is impossible to predict with any certainty. I totally agree with that. It is like predicting when a stretched rubber band will break. It is just more and more likely as the tension gets higher and higher.

But as mentioned earlier, Shiller in an interview just a few days ago said that he had reduced his stock AA, but was not completely out. He offered no more details than that.

PS. Shiller mentioned the above as an answer to a side question during an interview about a recent book that he coauthored ("Phishing for Phools"). I am having problems finding it again.

PPS. In the 1st edition of his "Irrational Exuberance" book (2000), Shiller warned of the stock crash. In the 2005 edition, Shiller warned of the housing bubble. Now in the 2015 edition, he warned of both stock and some RE markets.

 

[NW-Bound]

OK, here's the interview with Yahoo Finance on Sep 25, where Shiller said he cut back his stock AA. He briefly mentioned that one could also hedge with options.

http://finance.yahoo.com/news/shill...lued---and-what-to-do-about-it-120337758.html

My search on the Web showed that he also mentioned reducing stock AA in his portfolio in an earlier interview on CNBC on Sep 3.