For people with the intellect to understand the economy it does. Just very few of those people
Those who understand the economy know it's a poor predictor of market returns.
Does Market Timing Work?
11–20 of 292 posts
Re: Does Market Timing Work?
#12[deleted]
Re: Does Market Timing Work?
#13They didn't discuss Peter Perfect's sister, Petra Perfect, who -- rather than just wait for the one bottom day for the year -- instead buys and sells repeatedly, throughout the year, at more local lows and highs.
Is that also considered market timing?
Re: Does Market Timing Work?
#14Re: Does Market Timing Work?
#15For people with the intellect to understand the economy it does. Just very few of those people
If this was true wouldn’t you have many more economists with multiple mullions just from market timing? Even if you can predict the market and you are correct it can stay irrational so i think this comment is completely incorrect
No becabuse academic credentials don’t mean anything
Re: Does Market Timing Work?
#16Re: Does Market Timing Work?
#17IMO, this is a much more comprehensive article on the same topic: https://www.aqr.com/-/media/AQR/Documents/Insights/White-Pap...
For unsophisticated investors, timing the market tends to keep money on the sidelines during growth periods, eroding long-term returns. This is part of why it's considered an investing sin - "time in the market beats timing the market." Sophisticated systematic investors can probably get good results with certain momentum-based market timing strategies, but most of us aren't sophisticated systematic investors.
Re: Does Market Timing Work?
#18Although when the s&p dropped 20% in a few days in March 2020 — that was clearly a buy signal. And when tech stocks dropped by 70-90% in Nov 2022. Those stocks are now up 2x/3x from bottom. Sure, long term it probably doesn’t work out to time the market but sometimes it’s pretty obvious what’s happening.
The March 2020 drop was from the pandemic lockdowns. In that moment, nobody knew that was a buy signal. Nobody knew then when economic activity would recover, if the pandemic would pass in two weeks or several months or many years.
Re: Does Market Timing Work?
#19Although when the s&p dropped 20% in a few days in March 2020 — that was clearly a buy signal. And when tech stocks dropped by 70-90% in Nov 2022. Those stocks are now up 2x/3x from bottom. Sure, long term it probably doesn’t work out to time the market but sometimes it’s pretty obvious what’s happening.
The March 2020 drop was from the pandemic lockdowns. In that moment, nobody knew that was a buy signal. Nobody knew then when economic activity would recover, if the pandemic would pass in two weeks or several months or many years.
"nobody knew" doesn't mean nobody acted. The rational actors that act only on information "everybody knows" are usually late to the game
Re: Does Market Timing Work?
#20Earlier quoted context omitted.
> people with the intellect to understand the economy Those people (we people) know not to try.
No there are people that can time the market.
There are people that have timed the market, but we can't distinguish if that came from actual predictive ability or just getting lucky.
And if it did come from predictive ability, then everyone would just copy their predictions and arbitrage it out.