Am I "market timing"?

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AerialWombat
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Am I "market timing"?

Post by AerialWombat » Fri Jun 15, 2018 2:45 pm

The US equities market appears to have gone on sale today.

My monthly Solo 401k contribution would normally go in on the 25th.

If I pulled the trigger today, instead, the buy order would execute next Tuesday morning, right when trading opens.

It probably doesn't matter for the sake of this conversation, but I use SWTSX (Schwab Total Stock Market Index) as a stand-in for VTSAX within my recently opened Solo 401k at eTrade.

Would I be chastised for "market timing" if I were to do this 10 days early? Can I still claim the title of Boglehead, or would I be losing my seat at the table? :beer

FWIW, I argue "no", because I'm 100% convinced that we'll see a 15-30 percent drop in the next 18 months. So this action is still contrary to my conviction, which is most certainly market timing.

onourway
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Re: Am I "market timing"?

Post by onourway » Fri Jun 15, 2018 2:48 pm

As of 3:47 PM EST VTI is down 0.15%. That's essentially flat, and not at all what I'd call a sale. I wouldn't bother. The market could be higher or lower when you make your contribution. Over the long run making it automatically on a fixed date will get you some winners and some losers and probably not impact your investment in any meaningful way.

That said - plenty of Bogleheads do exactly what you are talking about when there is a bona-fide Really Bad Day. (Search the archives).

jebmke
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Re: Am I "market timing"?

Post by jebmke » Fri Jun 15, 2018 2:49 pm

AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
The US equities market appears to have gone on sale today.
Total Stock Market is down 15bp. Less than noise.
When you discover that you are riding a dead horse, the best strategy is to dismount.

Jordan4FI
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Re: Am I "market timing"?

Post by Jordan4FI » Fri Jun 15, 2018 2:50 pm

Not at all.. I invest weekly so I always have the chance to buy low, buy mid, and buy "high".. cause no matter what we all plan that today's value is the lowest we see in our lifetime..

delamer
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Re: Am I "market timing"?

Post by delamer » Fri Jun 15, 2018 2:57 pm

AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
FWIW, I argue "no", because I'm 100% convinced that we'll see a 15-30 percent drop in the next 18 months. So this action is still contrary to my conviction, which is most certainly market timing.
So because you’d be taking an action that is in conflict with your expectations, that somehow means market timing isn’t really market timing?

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Fri Jun 15, 2018 3:01 pm

onourway wrote:
Fri Jun 15, 2018 2:48 pm
That said - plenty of Bogleheads do exactly what you are talking about when there is a bona-fide Really Bad Day. (Search the archives).
Wowsa... Gold mine of posts re: Really Bad Day. Thank you!

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Fri Jun 15, 2018 3:03 pm

Jordan4FI wrote:
Fri Jun 15, 2018 2:50 pm
Not at all.. I invest weekly so I always have the chance to buy low, buy mid, and buy "high".. cause no matter what we all plan that today's value is the lowest we see in our lifetime..
Just out of curiosity, do you approach a little bit more aggressively than just dollar cost averaging?

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Fri Jun 15, 2018 3:06 pm

delamer wrote:
Fri Jun 15, 2018 2:57 pm
AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
FWIW, I argue "no", because I'm 100% convinced that we'll see a 15-30 percent drop in the next 18 months. So this action is still contrary to my conviction, which is most certainly market timing.
So because you’d be taking an action that is in conflict with your expectations, that somehow means market timing isn’t really market timing?
I see your point. :sharebeer

livesoft
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Re: Am I "market timing"?

Post by livesoft » Fri Jun 15, 2018 3:17 pm

You are market timing because you did not invest the money as soon as you had it available to invest.
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JustinR
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Re: Am I "market timing"?

Post by JustinR » Fri Jun 15, 2018 6:54 pm

You changed the timing of your investing based on what the market is doing. Yes, it's market timing.

stlutz
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Re: Am I "market timing"?

Post by stlutz » Fri Jun 15, 2018 7:05 pm

If you had bought VTI at about 10:30 this morning and then sold at 2:30, that would have been good market timing. if you didn't do that, then I wouldn't try to time your purchases and sales around short-term market moves.

mortfree
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Re: Am I "market timing"?

Post by mortfree » Fri Jun 15, 2018 7:06 pm

I buy VTI when it goes below $140.

It is market timing and I like it.

MotoTrojan
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Re: Am I "market timing"?

Post by MotoTrojan » Fri Jun 15, 2018 7:07 pm

livesoft wrote:
Fri Jun 15, 2018 3:17 pm
You are market timing because you did not invest the money as soon as you had it available to invest.
This. I invest Roth/taxable as soon as I can, and 401k obviously comes as soon as possible as it comes from my paycheck.

I will admit though that I’ve dipped into cushion, savings, EF (backed up by healthy taxable though) etc when the market actually dumps, and then built it back in subsequent weeks. Today was not a sale.

MotoTrojan
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Re: Am I "market timing"?

Post by MotoTrojan » Fri Jun 15, 2018 7:08 pm

mortfree wrote:
Fri Jun 15, 2018 7:06 pm
I buy VTI when it goes below $140.

It is market timing and I like it.
Why?

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Re: Am I "market timing"?

Post by Fallible » Fri Jun 15, 2018 7:08 pm

AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
... I'm 100% convinced that we'll see a 15-30 percent drop in the next 18 months.
...

I think the real question here is on what basis are you 100% convinced?
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mortfree
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Re: Am I "market timing"?

Post by mortfree » Fri Jun 15, 2018 7:20 pm

MotoTrojan wrote:
Fri Jun 15, 2018 7:08 pm
mortfree wrote:
Fri Jun 15, 2018 7:06 pm
I buy VTI when it goes below $140.

It is market timing and I like it.
Why?
Behavioral. And seems to be range bound - appx 135-145ish.

I only buy 5 or 10 shares at a time and it is a taxable account. No rush. Seems to work out to every other month for a buy.

Illogical

AlwaysWannaLearn
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Re: Am I "market timing"?

Post by AlwaysWannaLearn » Fri Jun 15, 2018 9:53 pm

.....
Last edited by AlwaysWannaLearn on Wed Jul 18, 2018 11:43 pm, edited 2 times in total.

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cfs
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Re: Am I "market timing"?

Post by cfs » Fri Jun 15, 2018 10:03 pm

The question: Am I market timing?
The answer: Your money, your portfolio, your decision.
Good luck y gracias por leer / cfs
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venkman
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Re: Am I "market timing"?

Post by venkman » Fri Jun 15, 2018 10:17 pm

AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
If I pulled the trigger today, instead, the buy order would execute next Tuesday morning, right when trading opens.

It probably doesn't matter for the sake of this conversation, but I use SWTSX (Schwab Total Stock Market Index) as a stand-in for VTSAX within my recently opened Solo 401k at eTrade.
If you're buying a mutual fund, won't the trade execute at the end-of-day NAV value? A lot could happen between now and the end of the next trading day.

Even if you were buying ETF's, the opening price on the next trading day can be a lot different than today's closing price, so you might end up not buying at a discount at all.

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GoldStar
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Re: Am I "market timing"?

Post by GoldStar » Sat Jun 16, 2018 6:43 am

AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
I'm 100% convinced that we'll see a 15-30 percent drop in the next 18 monthslo.
I'm confused by your question/post. If you are 100% that the market will drop 15-30% why do you have ANY money in? You are investing with 100% certainty you will lose 15-30%? Why?

Jordan4FI
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Re: Am I "market timing"?

Post by Jordan4FI » Sat Jun 16, 2018 8:21 am

AerialWombat wrote:
Fri Jun 15, 2018 3:03 pm
Jordan4FI wrote:
Fri Jun 15, 2018 2:50 pm
Not at all.. I invest weekly so I always have the chance to buy low, buy mid, and buy "high".. cause no matter what we all plan that today's value is the lowest we see in our lifetime..
Just out of curiosity, do you approach a little bit more aggressively than just dollar cost averaging?
No I do not believe I do, I just figure that if I can do it weekly (auto-invest on Vanguard) why not do it that way, always a steady climb and a chance to pick up as many low prices as possible.. I used to get paid once a month also, so that worked better for me. Now we get paid 2 times a month..and just keep it weekly investing cause I think its cool. And I am just accustomed to it.

The Wizard
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Re: Am I "market timing"?

Post by The Wizard » Sat Jun 16, 2018 8:31 am

JustinR wrote:
Fri Jun 15, 2018 6:54 pm
You changed the timing of your investing based on what the market is doing. Yes, it's market timing.
I market time as well.
When I have extra money that's destined for the total stock market fund in my taxable account, I don't like to buy on a significantly Up day.
So I wait a little while until a Down day happens along.
This is called Buying On The Dips...
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Ged
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Re: Am I "market timing"?

Post by Ged » Sat Jun 16, 2018 8:33 am

It's IMT.

Inconsequential Market Timing.

I try to do a little of it myself - try to time when I buy/sell during rebalancing.

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Sat Jun 16, 2018 8:38 am

GoldStar wrote:
Sat Jun 16, 2018 6:43 am
AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
I'm 100% convinced that we'll see a 15-30 percent drop in the next 18 monthslo.
I'm confused by your question/post. If you are 100% that the market will drop 15-30% why do you have ANY money in? You are investing with 100% certainty you will lose 15-30%? Why?
Because I could be (...likely am...) absolutely wrong, and FOMO is strong from having no investments at all during the recent/current bull run.

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Sat Jun 16, 2018 8:41 am

The Wizard wrote:
Sat Jun 16, 2018 8:31 am
JustinR wrote:
Fri Jun 15, 2018 6:54 pm
You changed the timing of your investing based on what the market is doing. Yes, it's market timing.
I market time as well.
When I have extra money that's destined for the total stock market fund in my taxable account, I don't like to buy on a significantly Up day.
So I wait a little while until a Down day happens along.
This is called Buying On The Dips...
From what I am reading about Really Bad Day timing, it seems to have a minor impact. But the psychologically it feels better!

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Sat Jun 16, 2018 8:41 am

The Wizard wrote:
Sat Jun 16, 2018 8:31 am
JustinR wrote:
Fri Jun 15, 2018 6:54 pm
You changed the timing of your investing based on what the market is doing. Yes, it's market timing.
I market time as well.
When I have extra money that's destined for the total stock market fund in my taxable account, I don't like to buy on a significantly Up day.
So I wait a little while until a Down day happens along.
This is called Buying On The Dips...
From what I am reading about Really Bad Day timing, it does seem to have a minor positive impact. But psychologically it feels better!

The Wizard
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Re: Am I "market timing"?

Post by The Wizard » Sat Jun 16, 2018 8:48 am

AerialWombat wrote:
Sat Jun 16, 2018 8:41 am
The Wizard wrote:
Sat Jun 16, 2018 8:31 am
JustinR wrote:
Fri Jun 15, 2018 6:54 pm
You changed the timing of your investing based on what the market is doing. Yes, it's market timing.
I market time as well.
When I have extra money that's destined for the total stock market fund in my taxable account, I don't like to buy on a significantly Up day.
So I wait a little while until a Down day happens along.
This is called Buying On The Dips...
From what I am reading about Really Bad Day timing, it seems to have a minor impact. But the psychologically it feels better!
Quarterly dividend for VTSAX comes out on the 20th, so I'm timing that as well, waiting till after then to put in another $1K...
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nisiprius
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Re: Am I "market timing"?

Post by nisiprius » Sat Jun 16, 2018 8:55 am

I think it is much better to say "Am I market timing? Very well then I am market timing. (I am large, I contain multitudes)*," then to do some market timing and kid yourself that you are not market timing.

Or, to riff on another source, "Time. Or time not. There is no 'am I.'"

*Walt Whitman, "Song of Myself"
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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GoldStar
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Re: Am I "market timing"?

Post by GoldStar » Sat Jun 16, 2018 9:31 am

AerialWombat wrote:
Sat Jun 16, 2018 8:38 am
GoldStar wrote:
Sat Jun 16, 2018 6:43 am
AerialWombat wrote:
Fri Jun 15, 2018 2:45 pm
I'm 100% convinced that we'll see a 15-30 percent drop in the next 18 monthslo.
I'm confused by your question/post. If you are 100% that the market will drop 15-30% why do you have ANY money in? You are investing with 100% certainty you will lose 15-30%? Why?
Because I could be (...likely am...) absolutely wrong, and FOMO is strong from having no investments at all during the recent/current bull run.
You could be wrong? Doesn't sound like you are 100% convinced then. I guess we have different definitions of 100% convinced. :)
The problem with market timing - even people who think they are certain about something have a tendency to waiver. ;)

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Sat Jun 16, 2018 9:43 am

GoldStar wrote:
Sat Jun 16, 2018 9:31 am
You could be wrong? Doesn't sound like you are 100% convinced then. I guess we have different definitions of 100% convinced. :)
The problem with market timing - even people who think they are certain about something have a tendency to waiver. ;)
LOL, yes indeed! This board wouldn’t exist otherwise, I would imagine.

So, to Nisiprius’ point as well, I accept being a market timer, plan to buy the dips, will be in the market out of FOMO, but am further solidified in my very recently selected 30/70 stock/bond AA as a hedge against my fear of a big drop in stocks. :)

Thanks, ya’ll!

MotoTrojan
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Re: Am I "market timing"?

Post by MotoTrojan » Sat Jun 16, 2018 12:36 pm

AerialWombat wrote:
Sat Jun 16, 2018 9:43 am
GoldStar wrote:
Sat Jun 16, 2018 9:31 am
You could be wrong? Doesn't sound like you are 100% convinced then. I guess we have different definitions of 100% convinced. :)
The problem with market timing - even people who think they are certain about something have a tendency to waiver. ;)
LOL, yes indeed! This board wouldn’t exist otherwise, I would imagine.

So, to Nisiprius’ point as well, I accept being a market timer, plan to buy the dips, will be in the market out of FOMO, but am further solidified in my very recently selected 30/70 stock/bond AA as a hedge against my fear of a big drop in stocks. :)

Thanks, ya’ll!
If earnings growth continues will you increase your AA? Forward P/E is quite reasonable on S&P500.

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Sat Jun 16, 2018 12:47 pm

MotoTrojan wrote:
Sat Jun 16, 2018 12:36 pm
If earnings growth continues will you increase your AA? Forward P/E is quite reasonable on S&P500.
No, I will not.

Half my net worth right now is in directly owned real estate, and I plan to continue purchasing multiple properties per year for the next several years due to the superior overall returns compared to equities. However, due to the risks of real estate, I choose to be overly conservative in the AA of my securities portfolio.

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Re: Am I "market timing"?

Post by greg24 » Sat Jun 16, 2018 1:26 pm

Market timing around the edges has small actual impact on your portfolio but helps behaviorally.

I market time in a few ways. I rebalance when I feel like it. When I occasionally accrue ad hoc investment money, I make a purchase on a Really Bad Day.

Inconsequential market timing (hey, I like that term) probably doesn't matter.

But changing your AA from 80/20 to 20/80 because you think a crash is coming could have disastrous consequences.

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randomizer
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Re: Am I "market timing"?

Post by randomizer » Sat Jun 16, 2018 1:37 pm

100% convinced? I’m not 100% convinced of anything.
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Carol88888
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Re: Am I "market timing"?

Post by Carol88888 » Sat Jun 16, 2018 1:55 pm

I have told myself that my policy will be to get my funds invested as soon as they become available to do so. But I fudge it a bit. Since my cash comes in quarterly, I allow myself the leeway that I get to choose which exact day to buy so long as everything gets invested before the next chunk cash arrives.

Having this little bit of discretion allows me to think I am in control. This is important to person used to buying individual stocks and new to ETFs.

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Re: Am I "market timing"?

Post by Fallible » Sat Jun 16, 2018 5:27 pm

AerialWombat wrote:
Sat Jun 16, 2018 9:43 am
GoldStar wrote:
Sat Jun 16, 2018 9:31 am
You could be wrong? Doesn't sound like you are 100% convinced then. I guess we have different definitions of 100% convinced. :)
The problem with market timing - even people who think they are certain about something have a tendency to waiver. ;)
LOL, yes indeed! This board wouldn’t exist otherwise, I would imagine.

So, to Nisiprius’ point as well, I accept being a market timer, plan to buy the dips, will be in the market out of FOMO, but am further solidified in my very recently selected 30/70 stock/bond AA as a hedge against my fear of a big drop in stocks. : ...
As has been noted by many posters on many threads on this forum, and as I understand it, market timing basically involves predicting what the market will do, e.g., predicting it will go up or down at a certain time by a certain amount) and investing based on that prediction. Buying on the dips needs no prediction since the market will always dip at some point, at which time, and if it's dipped low enough, one can buy.
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MotoTrojan
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Re: Am I "market timing"?

Post by MotoTrojan » Sat Jun 16, 2018 5:57 pm

AerialWombat wrote:
Sat Jun 16, 2018 12:47 pm
MotoTrojan wrote:
Sat Jun 16, 2018 12:36 pm
If earnings growth continues will you increase your AA? Forward P/E is quite reasonable on S&P500.
No, I will not.

Half my net worth right now is in directly owned real estate, and I plan to continue purchasing multiple properties per year for the next several years due to the superior overall returns compared to equities. However, due to the risks of real estate, I choose to be overly conservative in the AA of my securities portfolio.
So you’ll stick at 30/70 for the long haul? I’m not sure that’s market timing but rather a change in your need/willingness to take risk. Doesn’t sound like market valuation is the big driver in the decision.

AerialWombat
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Re: Am I "market timing"?

Post by AerialWombat » Sat Jun 16, 2018 8:55 pm

greg24 wrote:
Sat Jun 16, 2018 1:26 pm
But changing your AA from 80/20 to 20/80 because you think a crash is coming could have disastrous consequences.
Just to be clear, I have not recently changed my AA from one thing to another. I've only been investing in securities for less than a year, and did not have a plan of any sort. I owned a random pile of funds that "sounded good". The 30/70 AA I recently selected is the first time I've ever had an AA, and I've been moving things around to get there the past few weeks.

I've also decided that I'm going to do the "buy the dip" / Really Bad Day thing. There is a frequent poster on here that goes by the name livesoft that rebalances on RBDs, and I plan to implement a version of that.

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