My experience with timing the market

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Kow
Posts: 28
Joined: Fri May 27, 2016 5:04 pm

My experience with timing the market

Post by Kow » Thu Mar 26, 2020 9:22 am

About 2 weeks ago when we were just in the beginning of this new Work from Home world and the US had not started to see their cases yet blow up, I felt confident the market hadn't bottomed and despite much of the general feedback here, felt I had to make some moves to protect the downside.

My plan was to liquidate my main brokerage account only and to not be out of the market for more then 2 weeks. Let the major news hit and then buy back in smaller blocks to get fully invested. I wasn't trying to be a world beater, just protect some principal over a short time. I also had planned to have my 401K which was heavily in bonds back into equity during this time period

The good:
I reduced my losses by 3%. Not as good as my hopeful 10% scenario but still came out positive and my 401K is only down 5% as of today and is now heavily in equities
I have a better sense of the chaos of the market and how counter intuitive the process is. When the market is going up I just wanted to buy buy buy and when it was going down I wanted to wait until it bottomed, an impossible task so one I'm glad I learned my lesson sticking with my plan on generally when to buy back in based on major news announcements expected.


The bad:
It's incredibly stressful trying to timethe market. The beauty of the boglehead way is not only does it give you a good investing plan, but it allows you to not worry as much when everyone else is worried and checking their balances everyday.
It's incredibly distracting. If i was doing this full time, I would not be as productive in my work and i believe it would be a career limiter

My learning:
The boglehead way is a great one and allows for a low stress investing model.
I do believe there are once in a 5-10 year type events could warrant some market timing, but its rare that they will have the long runway this one had so I don't anticipate changing my plan and definitely will not make this a habit.
My asset allocation is where it should be, but again with some market timing. I was roughly 75/25 equity/bonds leading up to this and after the 30% drop have shifted to a 90/10 and soon a 100/0. This will not last forever but i've always been comfortable at higher equity amounts but want to use some judgement as to my exact mix as situations warrant
Don't get too greedy. You can never time the bottom and i would imagine we have more wild swings down to go, but I didn't want to risk it and needed to focus on other things.

I just wanted to post to share my perspectives and see how others felt. I'm glad i'm done trading and am back fully in the market so I can stop following the day to day trends. I know we may not be close to the bottom yet but that was as much and as longer as I can handle.

And a special shout out to anyone working in the medical field putting themselves at risk in these crazy times. We all appreciate it.

Megamill
Posts: 78
Joined: Sun Feb 11, 2018 10:44 am

Re: My experience with timing the market

Post by Megamill » Thu Mar 26, 2020 9:40 am

fwiw, I swing traded itot so far for one "cycle". After a a few huge down days, bought 1,000 shares (cash i had in ira) then waited until yesterday to sell into the rally. Goal is to make a few k per week to make up the huge losses in my other holdings (which i will not sell), taking advantage of the volatility but knowing i could be stuck waiting longer than a week to "cash out" or watching a follow-on rally day like today and regretting that i could have made an extra $2k if i had waited until today to sell. i must admit, i don't know nothing and after a few huge down days in a row, it can be stressful but i have full confidence in the resilience of the USA so thinking i'm at least spreading my risk across the entire market this way. I know it's totally against the BH philosophy, but is anyone else doing something like this?

Vanguard Fan 1367
Posts: 1340
Joined: Wed Feb 08, 2017 3:09 pm

Re: My experience with timing the market

Post by Vanguard Fan 1367 » Thu Mar 26, 2020 10:03 am

I have been fried, dried, and laid to the side with my market timing. John Bogle's books, YouTube videos, and other things breathed wonderful new life into my investment practices. Thank you Jack. I gave up market timing in 2014.

johan851
Posts: 163
Joined: Sun Apr 17, 2011 12:59 pm

Re: My experience with timing the market

Post by johan851 » Thu Mar 26, 2020 10:12 am

This is a great take, and I've had a similar experience over the past few weeks. My market timing dilemma wasn't intentional. Though a series of fortunate events, I found myself with a significant amount of cash ready to put into my retirement accounts right as the dip happened.

I planned to execute an aggressive DCA plan over a few weeks, but I haven't defined it well enough. That's left me in a weird spot where I'm cheering for the market to go down and frustrated when it goes up.

The way you put it is exactly my experience. It's more stressful than anything. I'm watching the markets all day, and worrying about it way more than I ever do. I'm ready to lump sum at this point just so I can go back to not paying attention.

Topic Author
Kow
Posts: 28
Joined: Fri May 27, 2016 5:04 pm

Re: My experience with timing the market

Post by Kow » Thu Mar 26, 2020 10:30 am

johan851 wrote:
Thu Mar 26, 2020 10:12 am
This is a great take, and I've had a similar experience over the past few weeks. My market timing dilemma wasn't intentional. Though a series of fortunate events, I found myself with a significant amount of cash ready to put into my retirement accounts right as the dip happened.

I planned to execute an aggressive DCA plan over a few weeks, but I haven't defined it well enough. That's left me in a weird spot where I'm cheering for the market to go down and frustrated when it goes up.

The way you put it is exactly my experience. It's more stressful than anything. I'm watching the markets all day, and worrying about it way more than I ever do. I'm ready to lump sum at this point just so I can go back to not paying attention.
Yeah the stress of paying attention in the short term is awful. The boglehead investing philosophy is such a stress reducer then an otherwise self managed process and a huge distraction. I was following the overnight trading trends and getting stressed only to see it completely reverse itself the next morning...i'm happy to be done messing around

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