Timing the market - Some say it’s possible?

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BigBevo
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Timing the market - Some say it’s possible?

Post by BigBevo » Mon Oct 22, 2018 5:44 pm

Ok, so I’ve been a part of this community for some time and have been with Vanguard almost four years now as I believe in the philosophy. Currently use an advisor but when I retire soon I’ll manage myself.

I had a debate this weekend with someone who said you can time the market. Howard Marks name came up who is with Oaktree Capital. I read his background and philosophy and it’s intersting about the concept of using data to minimize losses in downturns and getting back in on the upswing even ‘if you don’t hit the perfect mark on the downs and ups you still gain more per year than passive investing.’ He gave an example since 1995 a 10% return with this method versus 7% with holding and doing nothing.

Anyone buy into this and try it? This may be the wrong board for this question...but I’m hoping some of you more experienced Bogleheads would have heard this concept before and have an opinion. Obviously taxable accounts have to be taken into consideration.

Appreciate any thoughts.

Silk McCue
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Re: Timing the market - Some say it’s possible?

Post by Silk McCue » Mon Oct 22, 2018 5:47 pm

Nobody knows nuthin!

Cheers

MotoTrojan
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Re: Timing the market - Some say it’s possible?

Post by MotoTrojan » Mon Oct 22, 2018 5:53 pm

Trend following may be what you are referring to; it is essentially using moving averages (200 and 50 day are common ones) to determine when to get in/out of the market. You miss some of the run-up and some of the down-turns, thus reducing volatility. There have been many periods I believe where the return was in-family with buy-and-hold (taxes aside), which some people like as the reduced max draw-down makes them feel more comfortable.

There have been professionally managed funds that traded on these principals; there probably still are some. If it was so successful, wouldn't we all be talking about these funds?

BigBevo
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Re: Timing the market - Some say it’s possible?

Post by BigBevo » Mon Oct 22, 2018 5:54 pm

It was referred to as a moving crossover strategy FYI.

BigBevo
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Re: Timing the market - Some say it’s possible?

Post by BigBevo » Mon Oct 22, 2018 5:58 pm

MotoTrojan wrote:
Mon Oct 22, 2018 5:53 pm
Trend following may be what you are referring to; it is essentially using moving averages (200 and 50 day are common ones) to determine when to get in/out of the market. You miss some of the run-up and some of the down-turns, thus reducing volatility. There have been many periods I believe where the return was in-family with buy-and-hold (taxes aside), which some people like as the reduced max draw-down makes them feel more comfortable.

There have been professionally managed funds that traded on these principals; there probably still are some. If it was so successful, wouldn't we all be talking about these funds?
Yeah...this is the concept and my post before I saw yours is the name he said the strategy was called...moving crossover strategy.

Dottie57
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Re: Timing the market - Some say it’s possible?

Post by Dottie57 » Mon Oct 22, 2018 6:06 pm

Always be sceptical of someone praising a product which they sell.

WhiteMaxima
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Re: Timing the market - Some say it’s possible?

Post by WhiteMaxima » Mon Oct 22, 2018 6:13 pm

Be aggressive when everyone is fear, be conservative when everyone is greedy. You can never time the market, but you can time the economical cycle. In one conclusion word: buy asset at it's fair value, sell asset when it's over valued. Invest like Warren Buffett

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Re: Timing the market - Some say it’s possible?

Post by tennisplyr » Mon Oct 22, 2018 6:15 pm

Anything is possible. Anyone ever heard of more risk, more reward?
Those who move forward with a happy spirit will find that things always work out.

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Re: Timing the market - Some say it’s possible?

Post by jakehefty17 » Mon Oct 22, 2018 6:18 pm

Never tried it, but anything is possible. Trying to time the market is a gamble though, and almost certainly unsustainable. Accurately predicting the market and beating the average return is a losers game IMO. Chances are that you will revert to the mean over time.

Just my 2 cents. This forum is dedicated to Boglehead principles of investing so a friendly reminder...

#5 - Never try to time the market
There is a large amount of research showing that typical mutual fund investors actually perform far worse than the mutual funds they invest in because they tend to buy after a fund has done well and tend to sell what they own when it has done poorly. Studies on timing using returns data show no evidence of positive timing. The vast majority of investors earn less than the market due to two common timing mistakes: buying yesterday's top performers, and letting your emotions cause you to attempt to predict the direction of the stock market. This behavior of buy high, sell low is guaranteed to produce poor results.

Instead, Bogleheads create a good plan and then stick with it, which consistently produces good outcomes over the long term.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

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JoMoney
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Re: Timing the market - Some say it’s possible?

Post by JoMoney » Mon Oct 22, 2018 6:21 pm

I think it's possible. I also think it's extremely difficult to do it with enough accuracy to consistently profit vs. buy and hold.
The aggregate of investors aren't going to achieve anything extra trying to beat each other in or out of the market, some will win, but only by as much as others lose. Some may win simply because of luck (broken clock is right twice a day), some may exhibit some skill and better information.
I believe that to the extent there are skilled players, there are many more less-skilled players that will lose trying to play that game.
The strategy I take, is to try to not be among the many losers in a game that has few winners and is zero-sum in aggregate.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Timing the market - Some say it’s possible?

Post by RadAudit » Mon Oct 22, 2018 6:49 pm

BigBevo wrote:
Mon Oct 22, 2018 5:44 pm
I read his background and philosophy and it’s intersting about the concept of using data to minimize losses in downturns and getting back in on the upswing
Interesting idea. I don't follow it because I know I can't time the market. However, what I did do during the last downturn was to rebalance the mostly tax-advantaged portfolio when it hit the rebalance bands. (+/-5% on AA of 50/50).

Truth in reporting, I didn't rebalance on the third time down because ... well, just because. What I did do however was I ran some numbers (number of years of SWR in bonds) and amended my IPS to remind me to not sell bonds at a loss in order to rebalance the portfolio now that I'm in retirement. And, no. I have no idea how much or if that approach helped my overall portfolio returns.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

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Re: Timing the market - Some say it’s possible?

Post by oldcomputerguy » Mon Oct 22, 2018 6:52 pm

Sure. Timing the market is theoretically possible. So is climbing Mount Everest. But I don't know anyone who has done either successfully.

Timing the market reliably and repeatably is a whole order of magnitude harder.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.


BigBevo
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Re: Timing the market - Some say it’s possible?

Post by BigBevo » Mon Oct 22, 2018 7:01 pm

Appreciate the input. As I get closer to retirement I don’t know if I’m getting more emotional about investing because I watch the ticker much more than when I was a busy young professional and rarely watched the market (my investments). I’ve actually always been long and hold.

I need to take my own advice and turn my devices off and go fishing/outside more often.

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Re: Timing the market - Some say it’s possible?

Post by KyleAAA » Mon Oct 22, 2018 7:04 pm

I believe it's possible, but so difficult none of us will be able to do it consistently. Winning the lottery is also possible, but I wouldn't recommend the lottery as a sound investment strategy.

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Taylor Larimore
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Re: Timing the market - Some say it’s possible?

Post by Taylor Larimore » Mon Oct 22, 2018 7:11 pm

BigBevo wrote:
Mon Oct 22, 2018 5:44 pm
Ok, so I’ve been a part of this community for some time and have been with Vanguard almost four years now as I believe in the philosophy. Currently use an advisor but when I retire soon I’ll manage myself.

I had a debate this weekend with someone who said you can time the market. Howard Marks name came up who is with Oaktree Capital. I read his background and philosophy and it’s intersting about the concept of using data to minimize losses in downturns and getting back in on the upswing even ‘if you don’t hit the perfect mark on the downs and ups you still gain more per year than passive investing.’ He gave an example since 1995 a 10% return with this method versus 7% with holding and doing nothing.

Anyone buy into this and try it? This may be the wrong board for this question...but I’m hoping some of you more experienced Bogleheads would have heard this concept before and have an opinion. Obviously taxable accounts have to be taken into consideration.

Appreciate any thoughts.
BigBevo:

This is what experts say:
Advisor Perspectives (8-8-2016): "The question is whether any of these (57) tactical allocation mutual funds have shown any ability to outperform a simple, passively managed 60/40 portfolio. The answer, at least for the last five years, is a resounding “no.”

Alliance Bernstein Research: "In 2005 we interviewed more than 500 financial advisors. 83% of the advisors we polled felt that if investors had stuck to their original asset allocation plan prior to 2000, they could have cut their losses by more than half over the following few years."

Frank Armstrong, author and adviser: "Endless tinkering is unlikely to improve performance, and chasing last period's stellar achiever is a losing strategy."

David Babson, co-author of Investing for a Successful Future: "It must be apparent to intelligent investors--if anyone possessed the ability to do so (market time) he would become a billionaire quickly."

Barron's Guide to Making Investment Decisions: "If we haven't said it enough, we'll say it again: Market timing is dangerous."

Bernard Baruch, famed investor: "Only liars manage to always be "out" during bad times and "in' during good times."

Peter Bernstein, author of 10 finance books: "You have to keep reminding yourself. We don't know what's going to happen with anything, ever."

Wm. Bernstein, author and adviser: "There are two kinds of investors, be they large or small: Those who don't know where the market is headed, and those who don't know that they don't know."

Jack Bogle: "After nearly 50 years in this business, I do not know of anybody who has done market timing successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently."

I started the Boglehead Contest in January 2001. Of 99 Diehard guesses that year, only 11 even guessed the direction of the stock market. Boglehead forecasts were worse in 2008. Only 2 out of 284 Bogleheads guessed how low the S&P 500 Index would plunge.

Bogleheads' Guide to Investing: "No one can predict what the stock market will do or which mutual fund will outperform in the future. This is why we diversify -- so that whatever happens we will not have all our money in losing investments."

Jack Brennan, former Vanguard CEO and author of Straight Talk on Investing: "If you're determined to succeed at investing, make it your first priority to become a buy-and-hold investor."

Warren Buffet: “The only value of stock forecasters is to make fortune-tellers look good."

Ben Carlson CPA, author of A Wealth of Common Sense: "Not only is market timing hard, but you incur fees, taxes and market impact costs, as well."

CDA/Wiesenberger: "Market timing is an ineffective strategy for mutual fund investors."

Andrew Clarke, financial adviser: "A successful investor has a good knowledge base, a well-defined investment plan, and nerves of steel to stick with it."

Jonathan Clements, Wall Street Journal columnist: "Take my word for it. Buy-and-hold is still your best long-run strategy."

Consumer Reports: "Dalbar research has found that both stock and bond investors tend to overreact to events, moving money in and out of mutual funds with breathtakingly bad timing."

Dalbar research (2015) "Mutual fund investors who hold on to their investments have been more successful than those who try to time the market."

Dick Davis, publisher of Dick Davis Digest: "No one can time the market on a consistent basis."

Pat Dorsey, former Morningstar Director of Fund Analysis: "Market-timing is bunk."

David Dreman, author of Contrarian Investment Strategies: "The performance of 185 tactical asset allocation mutual funds was compared with buy-and-hold strategies and equity mutual funds over the years 1985-97. Over this period the S&P 500 Index increased 734%, average equity funds increased 598%, and tactical asset allocation funds increased 384%."

Charles Ellis, author of The Loser's Game: "Market timing is a wicked idea. Don't try it-ever."

Javier Estrada Research: "The odds against successful market timing are just staggering."

Paul Farrell, CBS MarketWatch: "Forget market timing in any form."

Rick Ferri, adviser and co-author of seven books including The Bogleheads' Guide to Retirement Planning: "The best practice for investors is to design a long-term globally diversified asset allocation plan based on present and future financial needs. Then follow that plan religiously, through all markets good and bad."

Forbes: "Benjamin Graham spent much of his career trying to devise a good formula for when to get into--and out of--the stock market. All formulas, he concluded, failed."

Fortune: "Let's say it clearly: No one knows where the market is going-experts or novices, soothsayers or astrologers. That's the simple truth."

Norman Fosback, author, researcher: "Don't sell out of fear or buy out of greed. Just keep making investments, and let the market take its course over the long-term."

John Kenneth Galbraith, economist: "The only function of economic forecasting is to make astrology look respectful."

Elaine Garzarelli, Wall Street's best known strategist until fired by Lehman Brothers: "I've learned that market timing can ruin you."

Good & Hermansen, authors of Index Your Way to Investment Success: "Staying on course may be just as difficult in bull markets as in bear markets."

Carol Gould, author & New York Times columnist: "For most investors the odds favor a buy-and-hold strategy."

Graham/Campbell Study: "From June 1980 through December 1992, 94.5% of 237 market timing investment newsletters had gone of business."

Benjamin Graham, famed investor: "If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what's going to happen to the stock market."

Louis S. Harvey, President of Dalbar Research: “When investors think short-term and try to time the market, they haven’t done very well. They have been leaving a lot of money on the table.”

Mark Hebner, financial author: "Efficient markets have no trends, so any speculation using trading systems or active investment strategies, such as stock, time, manager, or style selection, will only detract from future market returns."

Chuck Hill, Director of Research at FirstCall/Thomson Financial: "At the peak of the bull market in March of 2000 only 0.7% of all recommendations on stocks issued by Wall Street brokerages and investment banks were to sell."

Morgan Housel, Wall Street Journal and Motley Fool columnist: "The odds that you will achieve long-term success by actively trading or timing the market round to zero."

Mark Hulbert, Editor of the Hulbert Financial Digest (1-18-2001): "Among the 160 or so newsletters the HFD monitors, the market timing recommendations of only 10 have beaten the stock market over the last decade on a risk-adjusted basis."

Daniel Kahneman, Nobel Laureate: "After receiving the Nobel Prize, Daniel Kahneman, was asked by a CNBC anchorman what investment tips he had for viewers. His answer: "Buy and hold.""

Michael Leboeuf, author of The Millionaire in You : "Timing the market is for losers. Time IN the market will get you to the winner's circle, and you'll sleep better at night."

Arthur Levitt, former SEC Chairman: "No one is smart enough to time the market's ups and downs."

Jessie Livermore, famous investor: "It never was my thinking that made the big money for me. It always was my sitting."

Peter Lynch, famed mutual fund manager: "Nobody can predict interest rates, the future direction of the economy or the stock market."

Burton Malkiel, author of the classic Random Walk Down Wall Street: "Buying-and-holding a broad-based market index fund is still the only game in town."

John Markese, PhD, President, American Association of Independent Investors: "Nobody, but nobody, has consistently guessed the direction of the bond or stock market over any meaningful length of time."

Paul Merriman, author of Investing for a lifetime: "I don’t think more than perhaps one in 100 investors will be successful using timing."

Morningstar Course 106: "We're not keen on market-timing. It just doesn't work."

Motley Fools: "We've yet to find anyone who can accurately and consistently predict the market's short-term moves."

Nick Murray, author of eleven financial books: "Timing the market is a fool's game, whereas time in the market is your greatest natural advantage."

"Odean and Barber tested over 66,400 investors between 1991 and 1997. Their findings: "The most active traders earned 7% less annually than buy-and-hold investors."

Gerald Perritt, financial author: "Forget trying to time the market and do something productive instead."

Don Phillips, Managing Director of Morningstar: "I can't point to any mutual fund anywhere in the world that's produced a superior long-term record using market timing as its main investment criteria."

Mike Piper, author of The Oblivious Investor: "When market-beating strategies become known they generally stop working."

Jane Bryant Quinn author and syndicated columnist: "The market timer's Hall of Fame is an empty room."

John Rekenthaler, Vice-President of Research for Morningstar: "Market-timers are circus clowns minus the funny suits. Even when they dodge the bear market, they inevitably miss the ensuing bull. Their track record is terrible."

Mary Roland, author of Best Practices for Financial Advisors: "Countless studies have proved that no one is able to time the market effectively."

Louis Rukeyser, famous (deceased) TV host: "In the long run it doesn't matter much whether your timing is great or lousy. What matters is that you stay invested."

Richard Russell, editor of Dow Theory Letters: "There are no geniuses on Wall Street, only geniuses for a while."

Paul Samuelson, Nobel Laureate: "The evidence is overwhelming that a thousand timer's who try to buy when stocks are low, and sell when they are high, is a damnably awful record."

Jim Schmidt, Editor: "For the 10 years that ended 12-31-2000, only one newsletter out of the 112 that Timers Digest follows managed to beat the S&P 500 Benchmark."

Bill Schultheis, adviser and author of The Coffeehouse Investor : "I have learned the hard way that market timing and trying to pick a fund that will out-perform the market are both losing strategies."

Charles Schwab: "I'm a strong advocate of buying and holding."

Fred Schwed Jr., author of 'Where are the Customers' Yachts?: "It turns out that I should have just bought them (securities), and thereafter I should have just sat on them like a fat, stupid peasant. A peasant however, who is rich beyond his limited dreams of avarice."

Chandan Sengupta author of The Only Proven Road to Investment Success: "Any investment method that relies on predicting the future is doomed to fail."

Jeremy Siegel, author of Stocks for the Long Run: "Winning with stocks requires only patience, not foresight."

W. Scott Simon, author of Index Funds: "Investors should look with a jaundiced eye at any market timing system being peddled by its guru-creator."

Paul Singer, hedge fund billionaire: “The important turning points in markets are never identified with precision in advance by ‘experts’ and policymakers."

James Stewart, Smart Money columnist": It's my belief that it's a waste of time to try to time any market decline, or try to pinpoint a market bottom."

Larry Swedroe, author and adviser: "Believing in the ability of market timers is the equivalent of believing astrologers can predict the future."

David Swensen, Manager of Yale Investments: "People should stop chasing performance and just put together a sensible portfolio regardless of the ups and downs of the market."

Andrew Tobias, author of The Only Investment Guide You Will Ever Need: "Don't waste money subscribing to investment letters or expensive services.

Tweddell & Pierce, financial authors: "Trust in time and forget market timing. Allow time to work its compounding magic for you. Let market timing inflict its miseries on someone else."

Eric Tyson, author of Mutual Funds for Dummies: "No one can predict the future."

Wall Street Journal Lifetime Guide to Money: "Few if any investors manage to be consistently successful in timing markets."

John Waggoner, USA Today financial columnist: "If you're considering doing your own market timing, the best advice is this: Don't."

Jason Zweig, author and Wall Street Journal columnist: "If you buy, and then hold a total-stock-market index fund, it is mathematically certain that you will outperform the vast majority of all other investors in the long run."
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

Starfish
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Re: Timing the market - Some say it’s possible?

Post by Starfish » Mon Oct 22, 2018 7:17 pm

I think one can time the market, given resources.
The question is if I can time the market. I can't.

Starfish
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Re: Timing the market - Some say it’s possible?

Post by Starfish » Mon Oct 22, 2018 7:20 pm

Taylor Larimore wrote:
Mon Oct 22, 2018 7:11 pm
BigBevo:

This is what experts say:
These people are just as experts as active funds managers. They have a product and a philosophy to sell. They are by no means objective researchers in the filed.
Believing Boggle is almost as wrong as believing those hedge fund guys.

John88
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Re: Timing the market - Some say it’s possible?

Post by John88 » Mon Oct 22, 2018 7:22 pm

Called technical analysis with many different indicators and time frames and there are many books on the subject you can always test it yourself. Get an account with Interactive Brokers use Sierra Charts and you can back or forward test the strategy with charts as fast as minutes or seconds. Many people lose money.

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Re: Timing the market - Some say it’s possible?

Post by staythecourse » Mon Oct 22, 2018 7:24 pm

Here is my opinion on these active management debates? Is it possible to produce +returns from security selection and/ or market timing? Sure. Has it been done? Sure. That is NOT the question.

The question every investor has to ask is can one produce extra returns with active management on a FORWARD basis post fees post transaction costs post taxes for 25+ years (just 1/2 of an investors lifetime) over the default well proven (ask Mr. Bogle) way of investing (passive investing)?

I just have not been convinced. I unlike others on this board don't believe in passive investing because Mr. Bogle says so. I do it because I have not seen enough data to support a more predictable mode of investing with such a high probability of success then what bogleheads suggest. I wish it was a different answer, but it isn't.

You only have one shot of investing for your financial future. Without better data why would you opt for such an inconsistent and less predictable mode of investing?

Good luck
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Timing the market - Some say it’s possible?

Post by Silk McCue » Mon Oct 22, 2018 8:16 pm

Starfish wrote:
Mon Oct 22, 2018 7:20 pm

These people are just as experts as active funds managers. They have a product and a philosophy to sell. They are by no means objective researchers in the filed.
Believing Boggle is almost as wrong as believing those hedge fund guys.
-1

Cheers

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sergeant
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Re: Timing the market - Some say it’s possible?

Post by sergeant » Mon Oct 22, 2018 8:42 pm

Maybe some can do it. I certainly can not! I've tried several times and have been terrible at it.
Lincoln 3 EOW!

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JoMoney
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Re: Timing the market - Some say it’s possible?

Post by JoMoney » Mon Oct 22, 2018 8:44 pm

I agree with the point of what Dr. Malkiel is saying here, ironically though his example is essentially the same example Howard Marks would use. What Malkiel offers as an example of bad market-timers, is simply the inverse of what Marks describes as his good market-timing.
If I understand what Marks has said, he doesn't argue that he can predict where the market is going, how high or low the swings will be, but that he can assess where the market is within a cycle. Even if you didn't know how high the dot-com boom would go, maybe you could assess that the odds were going against you being in the market, and in the sell off of the economic crisis that the odds were in favor of investing.
Marks, and others who make a career in selling their investment advice, make a persuasive argument. In practice though, it's more difficult then he (and others) would like to believe. I don't believe markets are absolutely "efficient", but the bulk of the money isn't "dumb money" buying high and selling low (to the extent those market participants exist, they tend to not keep the money very long ).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Taylor Larimore
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Re: Timing the market - Some say it’s possible?

Post by Taylor Larimore » Mon Oct 22, 2018 8:49 pm

Starfish wrote:Believing Boggle is almost as wrong as believing those hedge fund guys.
Starfish:

You could not be more wrong.

I once wrote a market-timing newsletter in the 80's -- maybe the most embarrassing mistake I ever made. Fortunately, I read Mr. Bogle's first book, "Bogle on Mutual Funds" published in 1993. Near the end of this book he listed Twelve Pillars of Wisdom which I adopted. The result is that my wife (now deceased) and I enjoyed a long retirement still free of financial worries.

Jack Bogle can do the same for you. A good start would be reading Jack's Little Book of Commons Sense Investing. I am sure it will change your financial life for the better.

Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Timing the market - Some say it’s possible?

Post by pkcrafter » Mon Oct 22, 2018 9:30 pm

BigBevo wrote:
Mon Oct 22, 2018 7:01 pm
Appreciate the input. As I get closer to retirement I don’t know if I’m getting more emotional about investing because I watch the ticker much more than when I was a busy young professional and rarely watched the market (my investments). I’ve actually always been long and hold.

I need to take my own advice and turn my devices off and go fishing/outside more often.
Whoa, you have to stop watching and getting emotional about investments. You are approaching a time when stability is of prime importance. Stop reading about and thinking about timing, it can only mess up your retirement.

NO!

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Re: Timing the market - Some say it’s possible?

Post by arcticpineapplecorp. » Mon Oct 22, 2018 9:47 pm

Howard Marks was recently interviewed on both Meb Faber's podcast and Master's In Business (Barry Ritholtz). I believe he was discussing a book about his memos (apparently Warren Buffett recommended he publish his memos). Ah, his book is coming out soon. You can find his memos on his website: https://www.oaktreecapital.com/insights ... arks-memos

He talked about his strategy. One of the things I remember him saying is that at times his returns are not as high as the market because he's taking a defensive position and not fully invested so his investors miss out on some of the upside, but they are ok with that if they're not as hurt on the downside.

You can here from the horse's mouth here (recent episodes):
https://mebfaber.com/2018/10/03/episode ... nvestment/
https://ritholtz.com/2018/10/mib-howard ... e-capital/
2 older episodes:
https://ritholtz.com/2017/02/mib-howard-marks-matters/
https://ritholtz.com/2015/07/mib-howard ... e-capital/

you can read more about oakmark here:
https://en.wikipedia.org/wiki/Oaktree_C ... Management

looks like they're a publicly traded company too so they've got split allegiances as I see it.

not sure what's going on but when I click on oaktree funds (U.S.) it just keeps me in a loop:
https://www.oaktreefunds.com/
and I can't actually see the funds.

guess they don't want me to invest with them.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: Timing the market - Some say it’s possible?

Post by Red Spot » Mon Oct 22, 2018 9:53 pm

The DJIA declined today - due to profit taking

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Re: Timing the market - Some say it’s possible?

Post by jalbert » Mon Oct 22, 2018 9:54 pm

tennisplyr wrote:
Mon Oct 22, 2018 6:15 pm
Anything is possible. Anyone ever heard of more risk, more reward?
It takes more risk. Whether there is greater expected reward is debatable. Most likely, you have a 50/50 chance of being right and over time, they should average out to no increased expected return. Because risk is increased, risk-adjusted expected return should be lower.
Risk is not a guarantor of return.

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Re: Timing the market - Some say it’s possible?

Post by jalbert » Mon Oct 22, 2018 9:54 pm

Red Spot wrote:
Mon Oct 22, 2018 9:53 pm
The DJIA declined today - due to profit taking
How does anyone know that was the root cause?
Risk is not a guarantor of return.

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UpsetRaptor
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Re: Timing the market - Some say it’s possible?

Post by UpsetRaptor » Mon Oct 22, 2018 9:55 pm

Occasionally? Sure, you can get lucky sometimes.

Consistently? Nope.

Even if it works till it doesn't, it'll be a larger portfolio each time, for when the "doesn't" happens...

HEDGEFUNDIE
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Re: Timing the market - Some say it’s possible?

Post by HEDGEFUNDIE » Mon Oct 22, 2018 10:01 pm

OP,

Our favorite backtesting tool PortfolioVisualizer offers a Market Timing Model.

https://www.portfoliovisualizer.com/tes ... ingModel=2

Play around with it and see how you do.

Red Spot
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Re: Timing the market - Some say it’s possible?

Post by Red Spot » Mon Oct 22, 2018 10:01 pm

jalbert wrote:
Mon Oct 22, 2018 9:54 pm
Red Spot wrote:
Mon Oct 22, 2018 9:53 pm
The DJIA declined today - due to profit taking
How does anyone know that was the root cause?
I don't think they do - but it is a pundit's favourite

BogleMelon
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Re: Timing the market - Some say it’s possible?

Post by BogleMelon » Mon Oct 22, 2018 10:29 pm

Starfish wrote:
Mon Oct 22, 2018 7:20 pm
Taylor Larimore wrote:
Mon Oct 22, 2018 7:11 pm
BigBevo:

This is what experts say:
These people are just as experts as active funds managers. They have a product and a philosophy to sell. They are by no means objective researchers in the filed.
Believing Boggle is almost as wrong as believing those hedge fund guys.
Selling a philosophy doesn't make anyone bad. It is selling an inferior product which is.
If you advice me not to pay high fees and save my money, then you are a good guy, or at least your intentions towards me are good ones.
If you advice me not to try to spend my quality time buying and selling then buying again and so on (while paying taxes and commissions) and lose my sleep quality over gambling (AKA day trading), then your deeds are good towards me.

Comparing people who "sell" quality education and common sense logic, to those greedy people who may lie to oversell an inferior product so that THEY can retire using your hard earning money, is not a fair comparison by any means.

And yes, some of those experts Taylor mentioned are researchers "in the field". but it seems you didn't notice the quotes, so here are some of them for you to review again:
Alliance Bernstein Research: "In 2005 we interviewed more than 500 financial advisors. 83% of the advisors we polled felt that if investors had stuck to their original asset allocation plan prior to 2000, they could have cut their losses by more than half over the following few years."
Consumer Reports: "Dalbar research has found that both stock and bond investors tend to overreact to events, moving money in and out of mutual funds with breathtakingly bad timing."
Javier Estrada Research: "The odds against successful market timing are just staggering."
Norman Fosback, author, researcher: "Don't sell out of fear or buy out of greed. Just keep making investments, and let the market take its course over the long-term."
Chuck Hill, Director of Research at FirstCall/Thomson Financial: "At the peak of the bull market in March of 2000 only 0.7% of all recommendations on stocks issued by Wall Street brokerages and investment banks were to sell."
Oh and it is Bogle not Boggle!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

BigBevo
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Re: Timing the market - Some say it’s possible?

Post by BigBevo » Mon Oct 22, 2018 10:45 pm

HEDGEFUNDIE wrote:
Mon Oct 22, 2018 10:01 pm
OP,

Our favorite backtesting tool PortfolioVisualizer offers a Market Timing Model.

https://www.portfoliovisualizer.com/tes ... ingModel=2

Play around with it and see how you do.
That great...thanks for posting.

And no, I never beat ‘Buy and Hold’ :)

Starfish
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Re: Timing the market - Some say it’s possible?

Post by Starfish » Mon Oct 22, 2018 11:20 pm

BogleMelon wrote:
Mon Oct 22, 2018 10:29 pm

Comparing people who "sell" quality education and common sense logic, to those greedy people who may lie to oversell an inferior product so that THEY can retire using your hard earning money, is not a fair comparison by any means.

Of course it is. I compared their intellectual bias, not financial results.

All that researchers say is that most people cannot time the market. I think that is obvious to everybody.
But I wouldn't be at all so keen to say that nobody can predict market.
Oh and it is Bogle not Boggle!
Sorry, not on my list of spelling concerns.

finite_difference
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Re: Timing the market - Some say it’s possible?

Post by finite_difference » Mon Oct 22, 2018 11:54 pm

Starfish wrote:
Mon Oct 22, 2018 11:20 pm
BogleMelon wrote:
Mon Oct 22, 2018 10:29 pm

Comparing people who "sell" quality education and common sense logic, to those greedy people who may lie to oversell an inferior product so that THEY can retire using your hard earning money, is not a fair comparison by any means.

Of course it is. I compared their intellectual bias, not financial results.

All that researchers say is that most people cannot time the market. I think that is obvious to everybody.
But I wouldn't be at all so keen to say that nobody can predict market.
Oh and it is Bogle not Boggle!
Sorry, not on my list of spelling concerns.
1. No one is saying that it’s impossible to beat the market. We are saying that you, as an individual, are not able to beat the market in the long term. But don’t feel too bad. Even experts that run mutual funds have a hard time beating the market, after fees, over the long term. Beating the market in the short term is not that difficult. Luck will do that. But it’s hard to be lucky and/or skillful for a long time.

2. Disrespect and ignore Bogle’s wisdom at your own peril.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

Starfish
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Re: Timing the market - Some say it’s possible?

Post by Starfish » Mon Oct 22, 2018 11:56 pm

Well, I think we agree on both points :).

John88
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Re: Timing the market - Some say it’s possible?

Post by John88 » Tue Oct 23, 2018 7:39 pm

Read this quote earlier today from Bernard Baruch which I believe he was referring to stock picking “If you are ready to give up everything else and study the whole history and background of the market and all principal companies whose stocks are on the board as carefully as a medical student studies anatomy—if you can do all that and in addition you have the cool nerves of a gambler, the sixth sense of a clairvoyant and the courage of a lion, you have a ghost of a chance."

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Re: Timing the market - Some say it’s possible?

Post by HomerJ » Tue Oct 23, 2018 7:45 pm

BigBevo wrote:
Mon Oct 22, 2018 5:44 pm
He gave an example since 1995 a 10% return with this method versus 7% with holding and doing nothing.
So you can easily prove he's an idiot with like 10 seconds of work.

Vanguard Total Stock Market Index Fund (VTSAX) has returned 10.3% a year since 1995.

So now you know you can't trust anything he says.
The J stands for Jay

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HomerJ
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Re: Timing the market - Some say it’s possible?

Post by HomerJ » Tue Oct 23, 2018 7:46 pm

BigBevo wrote:
Mon Oct 22, 2018 7:01 pm
Appreciate the input. As I get closer to retirement I don’t know if I’m getting more emotional about investing because I watch the ticker much more than when I was a busy young professional and rarely watched the market (my investments). I’ve actually always been long and hold.

I need to take my own advice and turn my devices off and go fishing/outside more often.
Yes.
The J stands for Jay

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Toons
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Re: Timing the market - Some say it’s possible?

Post by Toons » Tue Oct 23, 2018 7:51 pm

I got in the Market in 1981.
I don't plan on heading for the exit door.




:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

J295
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Re: Timing the market - Some say it’s possible?

Post by J295 » Tue Oct 23, 2018 8:35 pm

Market timing can be accomplished, the real question is for how long and what are the risk adjusted “costs” of attempting timing ....

Bill Miller had excellent market timing… Until he didn’t.

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Watty
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Re: Timing the market - Some say it’s possible?

Post by Watty » Tue Oct 23, 2018 9:06 pm

BigBevo wrote:
Mon Oct 22, 2018 5:44 pm
Appreciate any thoughts.
Over the years there have been a number of ways to use some quirk to time the market which seemed to work, and my actually have worked. The problem is that one that quirk was published the advantage would quickly become negligible or even negative. The problem is that when lots of people were trying to exploit the the quirk it no longer works. That is sort of like a great unknown "hole in the wall" restaurant that becomes popular and on all the lists.

People know this and if they did find a quirk that they wanted to exploit they would never publish it.

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Re: Timing the market - Some say it’s possible?

Post by Lancelot » Tue Oct 23, 2018 9:29 pm

oldcomputerguy wrote:
Mon Oct 22, 2018 6:52 pm
Sure. Timing the market is theoretically possible. So is climbing Mount Everest. But I don't know anyone who has done either successfully.

Timing the market reliably and repeatably is a whole order of magnitude harder.
I agree. And you have to be right twice; when to get out and when to get back in. But it's human nature to love a good tale :) Who will attract the largest following at a cocktail party: the Boglehead that amassed three million investing in low cost index funds over a 35 year time period or the day trader that acquired an equal amount in 3.5 years? Oh and the day trader was homeless and used free computers at the local public library :mrgreen:
No Where for Very Long...

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TeamArgo
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Re: Timing the market - Some say it’s possible?

Post by TeamArgo » Tue Oct 23, 2018 10:01 pm

KyleAAA wrote:
Mon Oct 22, 2018 7:04 pm
I believe it's possible, but so difficult none of us will be able to do it consistently. Winning the lottery is also possible, but I wouldn't recommend the lottery as a sound investment strategy.
Drats! The 1.6 Billion drawing is in two minutes, and NOW you tell me!
"A man hears what he wants to hear, and disregards the rest" -Paul Simon (The Boxer, 1970)

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