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Does Market Timing Work?

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Re: Does Market Timing Work?

#131

Post by jraby3 »

bob1029 wrote: post #114

Timing absolutely doesn't work in my experience. This effectively makes many forms of derivative instrument worthless to me. There are only a few targeted situations where I believe something might happen within a certain window, but I absolutely wouldn't bet more than 1-2% of my portfolio on anything with time decay attached to it. What works better for me is joining in on earnings calls and reviewing presentation m…

QQQ went like 17 years from its 2001 high till it made it back to the same price. S&P is probably less stressful for the type of investor you are talking about.

Re: Does Market Timing Work?

#132

Post by satvikpendem »

Arainach wrote: post #126
bob1029 wrote: post #114

Timing absolutely doesn't work in my experience. This effectively makes many forms of derivative instrument worthless to me. There are only a few targeted situations where I believe something might happen within a certain window, but I absolutely wouldn't bet more than 1-2% of my portfolio on anything with time decay attached to it. What works better for me is joining in on earnings calls and reviewing presentation m…

>Monkey brain is much more dangerous than losing a few % APY ....and you don't even need a few percent to throw it in a target date fund that regularly rebalances for you

Target date funds usually do worse than throwing everything into VTI and holding for 30 years.

Re: Does Market Timing Work?

#133

Post by bannedbybros »

rr808 wrote: post #113

The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…

[dead]

Re: Does Market Timing Work?

#134

Post by satvikpendem »

vik0 wrote: post #68

Ever since I read The Black Swan by Nassim Nicholas Taleb and Thinking, Fast and Slow by Daniel Kahneman, I can't take anything related to the stock market seriously (among other things as well, but this post is related to the stock market, so that's why I'm focusing on it.) There's very little skill involved, which isn't to say there is no skill involved whatsoever - but at the end of the day it really is just luck…

You should also read Adaptive Markets by Andrew Lo. It talks about how behavior psychology affects the markets, as Homo Economicus does not really exist, people are not rational actors individually or even at scale in other domains (see, for example, loss aversion) so there is no reason to think we are rational when dealing with the markets either.

Re: Does Market Timing Work?

#135

Post by blibble »

WXLCKNO wrote: post #120
rr808 wrote: post #113

The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…

This is what I think too. Now obviously we're possibly on the verge of another massive change in tech with AI but there's still nothing that guarantees that the market has to go up.

> Now obviously we're possibly on the verge of another massive change in tech with AI

could easily turn out to be another nft style "boom"

Re: Does Market Timing Work?

#136

Post by Devasta »

rr808 wrote: post #113

The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…

1 - People should be able to retire.

2 - Their retirement should be financed by 401ks and the like.

3 - Stock Markets can go down as well as up.

You can't have all three, so the government will always ensure that the stock market goes up long term.

Re: Does Market Timing Work?

#137

Post by tlarkworthy »

rr808 wrote: post #113

The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…

I believe human ingenuity and power over the elements goes up 7% a year, of which, the stock market is a proxy for. We are a networked organism and good at leveraging innovation at a global scale through supply chains. I see no reason to be pessimistic, we have AI, we have better space flight, we constantly improving energy sources.

Re: Does Market Timing Work?

#138

Post by malfist »

rr808 wrote: post #119
samjmck wrote: post #117

Earlier quoted context omitted.

Isn't that only a problem if you are only invested in the US? There exists ETFs that are invested in multiple developed countries, such as index funds that track the MSCI World.

Yes. After continued under performance of non-US markets, not many people have a significant exposure to those places.

Are you sure about that? The standard boglehead portfolio has ~1/3 of stock holdings in non-us funds.

Re: Does Market Timing Work?

#139

Post by brigadier132 »

WXLCKNO wrote: post #120
rr808 wrote: post #113

The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…

This is what I think too. Now obviously we're possibly on the verge of another massive change in tech with AI but there's still nothing that guarantees that the market has to go up.

The market is composed of companies, each of these companies are composed of people trying to better their own lives by working hard. When you buy an index fund you are essentially betting on all these people collectively working hard to improve their lives and if incentives are correctly aligned this should also mean the value of these businesses growing.

Re: Does Market Timing Work?

#140

Post by ozzydave »

envsubst wrote: post #112
vik0 wrote: post #68

Ever since I read The Black Swan by Nassim Nicholas Taleb and Thinking, Fast and Slow by Daniel Kahneman, I can't take anything related to the stock market seriously (among other things as well, but this post is related to the stock market, so that's why I'm focusing on it.) There's very little skill involved, which isn't to say there is no skill involved whatsoever - but at the end of the day it really is just luck…

Nassim Taleb made his money trading markets.

This data set should be expanded to include 100 of his peers who started trading at the same time.
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