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Does Market Timing Work?

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Re: Does Market Timing Work?

#141

Post by PaulDavisThe1st »

Devasta wrote: post #136
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.

Or you can elect a government that fundamentally doesn't agree with #1.

Re: Does Market Timing Work?

#142

Post by theptip »

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…

> No one really knows but it wont be as good as the last few decades.

Such confidence! The first part is of course true, but you’ll make money teaching the market that you are smarter if the latter is true.

Perfectly possible that AI kicks the economy into overdrive in the next few years and growth increases. I wouldn’t bet my house on it, but also wouldn’t bet my house against it either.

Re: Does Market Timing Work?

#143

Post by voidfunc »

satvikpendem wrote: post #132
Arainach wrote: post #126

Earlier quoted context omitted.

>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.

Isn't that expected because of the automatic re-balancing to minimize risk? I don't think anyone goes with target date funds thinking they are going to maximize returns because it's a tool to buy and forget.

Re: Does Market Timing Work?

#144

Post by jfthoi »

PaulDavisThe1st wrote: post #141
Devasta wrote: post #136

Earlier quoted context omitted.

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.

Or you can elect a government that fundamentally doesn't agree with #1.

I'm unsure if you're being facetious so I'll take your comment at face value.

Government isn't a static thing - especially one that is elected by the people (for the people). Sooner or later members within said government will also consider retirement. So even if you can elect a government that disagrees with #1, you won't be able to hold it for too long.

Re: Does Market Timing Work?

#145

Post by PaulDavisThe1st »

rocqua wrote: post #38

I wonder if there is a fixed buy date that outperforms dollar cost averaging. Something like "around new years lots of people get money they invest, so prices tend to pop, so buy in november' There just needs to be some kind of yearly pattern for such a strategy to exist. I even recall reading about it on money-stuff. But I can't remember the months.

If there was such a pattern, and then a strategy to exploit it, the pattern would change.

Re: Does Market Timing Work?

#146

Post by wolverine876 »

tlarkworthy wrote: post #137
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.

Then why didn't the markets go up in Japan and Europe (per the GP)? Also, why do the US (and maybe other) securities markets increase when the underlying economy is performing poorly?

Re: Does Market Timing Work?

#147

Post by wolverine876 »

Devasta wrote: post #136
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.

Or governments could insure retirement income.

Re: Does Market Timing Work?

#148

Post by satvikpendem »

voidfunc wrote: post #143
satvikpendem wrote: post #132

Earlier quoted context omitted.

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

Isn't that expected because of the automatic re-balancing to minimize risk? I don't think anyone goes with target date funds thinking they are going to maximize returns because it's a tool to buy and forget.

But buying VTI is also a tool to buy and forget and it maximizes returns compared to target date funds. They're lower due to fees as well as investing too much into bonds when young when it's not necessary, one should invest in bonds when closer to retirement instead.

Re: Does Market Timing Work?

#149

Post by sandworm101 »

Devasta wrote: post #136
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.

>> 1 - People should be able to retire.

Why? Retirement is a very recent phenomena. The idea of someone earning enough during their working life to then fund several decades of non-working life is a very modern thing, maybe only the last sixty years or so. Only a very rarified few were ever wealthy enough to actively stop working prior to becoming physically unable to work. And then, for most all of human history, those too old to work lived out their remaining few years being taken care of by their children. I'm would not casually assume any "right" to the modern concept of retirement.

Re: Does Market Timing Work?

#150

Post by wolverine876 »

brigadier132 wrote: post #139
WXLCKNO wrote: post #120

Earlier quoted context omitted.

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.

> The market is composed of companies, each of these companies are composed of people trying to better their own lives by working hard.

They are composed of people doing that, people rigidly protecting their incomes and/or status, people cheating others, and especially these days, people trying to squeeze every drop of blood out of every other stakeholder (investors, customers, employees).

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