Does market timing work for me? It depends on one's benchmark or way of measuring.
If I consider ....
Thanks for the comment and update.
I think too often folks might think that Market Timing is to go between All-Cash and All-Stocks for one's entire portfolio based on some feelings or signals. It looks like we are not doing that.
Some folks might call what I am doing Tactical Asset Allocation. Others might call it Over-rebalancing. No matter because it is what it is.
As for benchmarks, I am using the following Vanguard funds:
VSMGX LifeStrategy Moderate Growth 60/40 allocation
VTWNX Target Retirement 2020 which is currently at 60/40, too
VBIAX Vanguard Balanced Index which is 60/40, but no international
Once I get ahead of these, I can simply try to match them for the remainder of the year and keep that advantage. I find that I am no good at going much less than 60% equities in order to avoid any guessed-at future losses. So I just have to lose money along with my benchmarks.
However, once I've lost the money, I have a better chance of recovering more of it than my benchmarks. Sometimes. I usually buy equities too soon and sell too soon. Of course, when I increase my percentage to equities, I am increasing risk, too.
I should in fact switch to a benchmark with higher equities temporarily, say a Vanguard Target Retirement 2030 fund for the Purists who say one cannot do better than passively-managed index funds. I can't argue with them, so I don't.
Does anybody else risk more than 10% of their total portfolio for these market timing activities? Or switch their asset allocation by 10% or more based on market changes in the previous week or month?