Market timer of 2007 2008 crash

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pension4ever
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Market timer of 2007 2008 crash

Post by pension4ever »

I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
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burritoLover
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Re: Market timer of 2007 2008 crash

Post by burritoLover »

If it were that simple, it would be super-easy to have some algorithm do it for any fund - imagine one that could avoid crashes and then buy back in at the exact right time - where's those that can consistently do that? - they don't exist - should be boatloads of them if it were that easy. Instead we have people here that still think they can market time but instead of the machine learning, advanced research, and teams of professionals (who still can't do it), it's replaced typically by what some investor feels is going to happen. Might as well get your divining rod or ouija board out.
Marseille07
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Re: Market timer of 2007 2008 crash

Post by Marseille07 »

pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
There is a poster who maintains 75/25 but buys the dip during a correction / bear market until 95/5.

This is actually really easy to do, but the question is do you come out ahead of being 95/5 the whole time.
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HMSVictory
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Re: Market timer of 2007 2008 crash

Post by HMSVictory »

"I never met anyone who could successfully time the market. I never met anyone who ever met anyone who could successfully time the market" - Jack Bogle

Much has been lost trying to do it anyway.
Stay the course!
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Lee_WSP
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Re: Market timer of 2007 2008 crash

Post by Lee_WSP »

Marseille07 wrote: Thu May 05, 2022 2:46 pm
pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
There is a poster who maintains 75/25 but buys the dip during a correction / bear market until 95/5.

This is actually really easy to do, but the question is do you come out ahead of being 95/5 the whole time.
This has already been hashed out. You do not come out ahead of 95/5, but have historically done better than 75/25 and you have less drawdowns than 95/5.
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Re: Market timer of 2007 2008 crash

Post by Marseille07 »

Lee_WSP wrote: Thu May 05, 2022 2:49 pm This has already been hashed out. You do not come out ahead of 95/5, but have historically done better than 75/25 and you have less drawdowns than 95/5.
Right, my question was actually rhetorical. It might still be a worthwhile strategy however, for the reasons you stated.
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MichRoots
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Re: Market timer of 2007 2008 crash

Post by MichRoots »

Not trying to be a wet towel. But this is Bogleheads so wanted to take the emotion out of our buying/selling.

https://www.aei.org/carpe-diem/more-evi ... ant-do-it/

With that said, I remember someone saying in 2009 that "this time it is different, the market is going to 0".... about a week later the market turned around and the SP gained about 50% in a month or so. The inflation of today reminds me somewhat of 2007-2008. Things were crazy and didn't make sense. Gas was going to high and something was going to break. But it seems those times were much worse and some believed the entire financial system was going to collapse. And while the market dropped from SP 1500 to 666, it did recover back to 1000 pretty quickly. So a 33% drop in SP 500 might be fair today. We are already down 14% so I have been deploying a higher % into SP500 each week we have a huge drop. Its not that I am a market timer. It just helps me sleep better at night.
Last edited by MichRoots on Thu May 05, 2022 3:00 pm, edited 1 time in total.
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Lee_WSP
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Re: Market timer of 2007 2008 crash

Post by Lee_WSP »

Marseille07 wrote: Thu May 05, 2022 2:50 pm
Lee_WSP wrote: Thu May 05, 2022 2:49 pm This has already been hashed out. You do not come out ahead of 95/5, but have historically done better than 75/25 and you have less drawdowns than 95/5.
Right, my question was actually rhetorical. It might still be a worthwhile strategy however, for the reasons you stated.
:beer Wasn’t sure, figured I’d post for anyone who wasn’t party to those discussions.
Firemenot
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Re: Market timer of 2007 2008 crash

Post by Firemenot »

Moving to an all-cash position is mind poison. Many people did that during the Great Recession and never got back in or got back in so late they were worse off. They were always waiting for the double, deeper dip.
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Re: Market timer of 2007 2008 crash

Post by invest4 »

I am not watching the Annette thread, but this may be of interest.

MarketWatch:

"...there is little to no benefit in waiting for a dip compared to investing immediately. The bigger the dip we wanted, the more time we spent in cash and the greater our opportunity cost relative to buying as we received cash."

https://www.marketwatch.com/story/heres ... _headlines


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dan7800
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Re: Market timer of 2007 2008 crash

Post by dan7800 »

I used to buy the dips, heck I was lucky and bought on literally the lowest day of 2020.

Now that I am a BH, I am all in. On dips I TLH and sell old holdings to buy VTI/VXUS (when the LTCG are low enough to avoid paying taxes on the sales).

Other than that, I buy and hold.
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arcticpineapplecorp.
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Re: Market timer of 2007 2008 crash

Post by arcticpineapplecorp. »

Image

also read this:

Better to Face the Correction by Larry Swedroe. Remember:
Pros Bad At Prediction

The evidence is very clear that professional mutual fund managers cannot predict the stock market. For example, in his famous book “A Random Walk down Wall Street,” Burton Malkiel cited a Goldman Sachs study that examined mutual funds’ cash holdings for the period 1970 through 1989.

In their efforts to time the market, fund managers raise cash holdings when they believe the market will decline and lower cash holdings when they become bullish. The study found that, over the period it examined, mutual fund managers miscalled all nine major turning points.

Legendary investor Peter Lynch offered yet another example. He pointed out that an investor who followed a passive investment strategy and stayed fully invested in the S&P 500 over the 40-year period beginning in 1954 would have achieved an 11.4% rate of return.

If that investor missed just the best 10 months (2% of them), his return fell 27%, to 8.3%. If the investor missed the best 20 months (or 4% of them), his return dropped 54%, to 6.1%. Finally, if the investor missed the best 40 months (or just 8% of them), his return declined 76%, all the way to 2.7%.

In a September 1995 interview with Worth magazine, Lynch put it this way: “Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”

source: https://www.etf.com/sections/index-inve ... nopaging=1
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JoeRetire
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Re: Market timer of 2007 2008 crash

Post by JoeRetire »

pension4ever wrote: Thu May 05, 2022 2:28 pm Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...
In 2007/2008 I just stuck to the plan and maxed 401k contributions.
Perhaps that's "buying slowly" in this context. I don't know.
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Re: Market timer of 2007 2008 crash

Post by Kenkat »

I did some rebalancing and continued contributing to my 401(k) so i was able to pick up shares at relatively lower prices than before the crash, but that’s about as good as you can hope for in my opinion. Market timing, even if you pull it off once, is very risky. Sooner or later you will miss a call and end up worse than if you had just stayed invested.
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peskypesky
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Re: Market timer of 2007 2008 crash

Post by peskypesky »

HMSVictory wrote: Thu May 05, 2022 2:47 pm "I never met anyone who could successfully time the market. I never met anyone who ever met anyone who could successfully time the market" - Jack Bogle
He never met AnnetteLouisan.
Fallible
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Re: Market timer of 2007 2008 crash

Post by Fallible »

pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself. ...
Not sure if you're talking about market timing or buying the dip. As I've always understood it, true timing involves predicting what the market will do and investing based on that prediction; buying the dip is buying after the price drops to a certain level.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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pension4ever
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Re: Market timer of 2007 2008 crash

Post by pension4ever »

Fallible wrote: Thu May 05, 2022 4:27 pm
pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself. ...
Not sure if you're talking about market timing or buying the dip. As I've always understood it, true timing involves predicting what the market will do and investing based on that prediction; buying the dip is buying after the price drops to a certain level.
Mea culpa I cashed out a big big chunk of my 401k % wise went to stable this was based on my feeling of inflation and how the 2020 bull run was unreal.

So am good on my exit, but I am slowly buying back in.

I am already up on from my exit and entry but is this market timing 🧐..
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Re: Market timer of 2007 2008 crash

Post by dvvader »

I've posted this before (during March 2020), but it applies here as well. I don't have a link to the original article unfortunately.
“Why don’t we just sell everything and wait this out? Get back in when the dust settles?”
This is the question every financial advisor is getting this week, from at least one or two clients. They’re asking out of genuine curiosity, not just panic or fear. And it’s a great question. The great answer is that you won’t know when the dust settles. There’s no airplane writing the “all clear” in the sky above your neighborhood. And when the dust settles, do you think stocks will be at their lows? Or will they have already rallied furiously, in anticipation of this? Let me give you an example. Today is March 9th. Precisely eleven years ago today, in 2009, the stock market stopped going down. There was no reason. The dust had settled, without fanfare or any sort of official announcement. If you had polled people that day, or week or even month, most would not have agreed that we had seen the worst. The economic headlines were not improving. But there it was. And by June 1st, less than 3 months later, the stock market had climbed 41% from that March low. And even with that having happened, the majority of participants still weren’t clear that the dust had fully settled. That we had, in fact, seen the worst. There were still people calling us 3, 5 and 7 years later who had gone to cash and still hadn’t gotten back into stocks. They missed a new record-high a few years later and hundreds of percentage points in compounding on their assets.
Looking in hindsight at March 2020, who thought March 23 was going to be the bottom?? We were still under the original 2 week lockdown at that point in time if I remember correctly! Nothing but fear and panic on TV and elsewhere. Times were truly crazy! Yet there it was. Really and truly I believe, nobody knows nothing!
Last edited by dvvader on Thu May 05, 2022 5:11 pm, edited 2 times in total.
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Fallible
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Re: Market timer of 2007 2008 crash

Post by Fallible »

pension4ever wrote: Thu May 05, 2022 4:41 pm
Fallible wrote: Thu May 05, 2022 4:27 pm
pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself. ...
Not sure if you're talking about market timing or buying the dip. As I've always understood it, true timing involves predicting what the market will do and investing based on that prediction; buying the dip is buying after the price drops to a certain level.
Mea culpa I cashed out a big big chunk of my 401k % wise went to stable this was based on my feeling of inflation and how the 2020 bull run was unreal.

So am good on my exit, but I am slowly buying back in.

I am already up on from my exit and entry but is this market timing 🧐..
Market timing is about the actual prediction, not necessarily how well the prediction turns out. I'm not sure exactly at what point you made a prediction and what it was; or if you cashed out after the downturn began. Market timing also includes predicting when the market will recover, i.e., knowing when to get back in. Complex market timing by the pros usually includes both. One of the best classics I've read on market timing is by Charles Ellis, Winning the Loser's Game, 7th ed., the chapter on "Beating the Market," pg. 24.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
MichRoots
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Re: Market timer of 2007 2008 crash

Post by MichRoots »

Back in 2009 I converted a large portion of my traditional IRA accounts to my Roth IRA account. I was excited that I might completely get rid of the traditional IRA since the amount in there may have gotten down to $10,000 or so after the 2009 conversion. Well, I hated paying the $400 or so in taxes off my 2009 returns so I did not convert anymore since.

I think that traditional account in 2021 was approaching $50,000 before the current market drop. :shock:
manuvns
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Re: Market timer of 2007 2008 crash

Post by manuvns »

bought VV for 44.xx$ in march 2009 but i only had 2k now it's 12K
Thanks!
MichRoots
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Re: Market timer of 2007 2008 crash

Post by MichRoots »

Maybe 10 years ago I put 85% in my stable allocation and 15% in my equity allocation.

The market rose 10% in 3-4 weeks and I have never attempted anything so brash ever again. There may have been times where I was 50% cash but only for a week or so.
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Re: Market timer of 2007 2008 crash

Post by richard.h.gao »

pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
Nope, I learned my lesson from 2008 that cash is king. So this time I am prepared.
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Re: Market timer of 2007 2008 crash

Post by richard.h.gao »

dan7800 wrote: Thu May 05, 2022 3:11 pm Now that I am a BH, I am all in. On dips I TLH and sell old holdings
Buy high, sell low. :oops:
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Re: Market timer of 2007 2008 crash

Post by richard.h.gao »

richard.h.gao wrote: Thu May 05, 2022 5:24 pm
dan7800 wrote: Thu May 05, 2022 3:11 pm Now that I am a BH, I am all in. On dips I TLH and sell old holdings
Buy high, sell low. :oops:
That's like reverse market timing. :-P
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1789
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Re: Market timer of 2007 2008 crash

Post by 1789 »

Bogle got lucky. Your luck may turn out different than him.
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Re: Market timer of 2007 2008 crash

Post by lazynovice »

richard.h.gao wrote: Thu May 05, 2022 5:24 pm
dan7800 wrote: Thu May 05, 2022 3:11 pm Now that I am a BH, I am all in. On dips I TLH and sell old holdings
Buy high, sell low. :oops:
No, It’s buy high, sell low, buy low, defer taxes.
dan7800
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Re: Market timer of 2007 2008 crash

Post by dan7800 »

richard.h.gao wrote: Thu May 05, 2022 5:24 pm
dan7800 wrote: Thu May 05, 2022 3:11 pm Now that I am a BH, I am all in. On dips I TLH and sell old holdings
Buy high, sell low. :oops:
If you use those funds to buy into another more high quality fund, I am not sure what the problem is?
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Re: Market timer of 2007 2008 crash

Post by invest2bfree »

pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
170 is not a deep recession.

120 is a deep recession.

170 would mean all your gains for the pandemic is gone.
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Re: Market timer of 2007 2008 crash

Post by tetractys »

Is this even a bear market yet? I haven’t seen much loss myself, and it’s been pretty even across assets. For those accumulating I would simply recommend continued investing. All I can see is a general call to chill out.

2008 was a bear where proper rebalancing and buying into the market paid off. What we’re seeing now is obviously different. That could change; but recent predictions are predictably all over tarnation.
Last edited by tetractys on Thu May 05, 2022 7:05 pm, edited 1 time in total.
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Re: Market timer of 2007 2008 crash

Post by willthrill81 »

HMSVictory wrote: Thu May 05, 2022 2:47 pm "I never met anyone who could successfully time the market. I never met anyone who ever met anyone who could successfully time the market" - Jack Bogle
Super ironic since he clearly did it himself in 2000.
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Re: Market timer of 2007 2008 crash

Post by Silverado »

I have long contended that that is a problem that happens here now and again. Sometimes someone posts nonstop with a bad strategy and it gets attention. The wrong attention. It’s often best to listen to those not talking.
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Re: Market timer of 2007 2008 crash

Post by egri »

I got lucky in March 2020 and bought in right at the bottom. Since then, I've contented myself with TSP at the beginning of the month and taxable brokerage at the middle.

I had a former CO who back in 2008 was watching the news and saw American Express was down to around $12. He thought 'I should buy some'. Then his phone rang and he got distracted and never did, and now they're up in the $170s.
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Re: Market timer of 2007 2008 crash

Post by firebirdparts »

2008 was a paper problem only. Nothing was actually harmed by those events, so the Govt simply had to choose who to keep in business and who to ruin. They are on the hook for bank failures, so generally they just prevent those. It was very obvious that there was going to be a buying opportunity and obvious (to me) you wanted to be 100% stocks once you are convinced that various agencies of the federal govt have a plan. I was not slow to buy and in fact I didn’t bother to sell. If I had, I would have been thrilled.

This is a little different in that globally, materials are plentiful but you can’t get them. We have extreme productivity because we have extreme specialization. It’s fragile. The Russian war could end in nuclear exchange, but then again it could just end in punitive treaties which demand reparations and possibly a big buffer zone in Eastern Europe. The last time we did that, it brought Hitler and Communism, both, resulting in about 100 million killings in the rest of the 20th century. So there might certainly be a lot of economic activity if de-globalization occurs while also turning carbon neutral. But this activity would not be more productive and profitable. Shouldn’t be, at least in theory.

I feel dumb saying this, but 2008, though recent, was a different time in that sane adults were available and especially Paulson and Bernanke. Back then, conspiracies were supposed to be about Lee Harvey Oswald. That could be a more serious problem this time. There is a sane adult shortage. I think it’s just a matter of time until they appoint a professional wrestler Fed chair.
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Re: Market timer of 2007 2008 crash

Post by ryman554 »

Marseille07 wrote: Thu May 05, 2022 2:46 pm
There is a poster who maintains 75/25 but buys the dip during a correction / bear market until 95/5.

This is actually really easy to do, but the question is do you come out ahead of being 95/5 the whole time.
How on earth is this easy to do?

1. You are 75/25
2. Uh oh, crash!
3. Now you are 50/50 (equities tanked you know)
4. So you relance into 95/5
5. Yay recovery!
6. Now you are 97/3 (that's how it works)
7. Time to get back to 75/25

I mean, i guess I get it. But it relies on a) knowing when step 2 is done, otherwise you send good money after bad and b) knowing when 6 is done to cash out so you get the maximal return.

The real answer is that the person doing this should be 95/5 to begin with, since they are taking huge risks when things look bleak. Ergo, they have the stomach for it.
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Re: Market timer of 2007 2008 crash

Post by Stinky »

Years ago, I subscribed to a newsletter called “Market Timer”, a monthly publication from a guy named Bob Brinker. He also had a nationwide weekend radio show called “Moneytalk”.

To Brinker’s credit, he almost precisely called both the top and the bottom in the 2000-2 timeframe. Since I wasn’t yet a Boglehead, I followed Brinkers advice and thought I did well.

But Brinker entirely missed the 2007-8 crash. Folks who followed him stayed fully invested all the way down.

So Bob Brinker was one for two in calling crashes.
Former life insurance company financial officer who sincerely believes that ”It’s a GREAT day to be alive!”
Marseille07
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Re: Market timer of 2007 2008 crash

Post by Marseille07 »

ryman554 wrote: Fri May 06, 2022 8:38 am How on earth is this easy to do?

1. You are 75/25
2. Uh oh, crash!
3. Now you are 50/50 (equities tanked you know)
4. So you relance into 95/5
5. Yay recovery!
6. Now you are 97/3 (that's how it works)
7. Time to get back to 75/25

I mean, i guess I get it. But it relies on a) knowing when step 2 is done, otherwise you send good money after bad and b) knowing when 6 is done to cash out so you get the maximal return.

The real answer is that the person doing this should be 95/5 to begin with, since they are taking huge risks when things look bleak. Ergo, they have the stomach for it.
The steps you described are accurate. However, a) is not correct - you don't have to snipe the bottom; you just start buying after the S&P goes -10% or some threshold like that, that's pretty much it.

As far as b), the poster rebalances once the S&P500 renews ATH I believe.

This method probably trails being 95/5 the whole time, but what's nice about it is your "normal" allocation is quite resilient at 75/25.
85% US + FM | 15% Cash
Firemenot
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Re: Market timer of 2007 2008 crash

Post by Firemenot »

Marseille07 wrote: Fri May 06, 2022 9:48 am
ryman554 wrote: Fri May 06, 2022 8:38 am How on earth is this easy to do?

1. You are 75/25
2. Uh oh, crash!
3. Now you are 50/50 (equities tanked you know)
4. So you relance into 95/5
5. Yay recovery!
6. Now you are 97/3 (that's how it works)
7. Time to get back to 75/25

I mean, i guess I get it. But it relies on a) knowing when step 2 is done, otherwise you send good money after bad and b) knowing when 6 is done to cash out so you get the maximal return.

The real answer is that the person doing this should be 95/5 to begin with, since they are taking huge risks when things look bleak. Ergo, they have the stomach for it.
The steps you described are accurate. However, a) is not correct - you don't have to snipe the bottom; you just start buying after the S&P goes -10% or some threshold like that, that's pretty much it.

As far as b), the poster rebalances once the S&P500 renews ATH I believe.

This method probably trails being 95/5 the whole time, but what's nice about it is your "normal" allocation is quite resilient at 75/25.
If you’re going to do such an approach there must be an algorithm trading product already available. Or just a human controlled one with set rules and triggers. Just invest in it.
Marseille07
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Re: Market timer of 2007 2008 crash

Post by Marseille07 »

Firemenot wrote: Fri May 06, 2022 9:56 am
Marseille07 wrote: Fri May 06, 2022 9:48 am
ryman554 wrote: Fri May 06, 2022 8:38 am How on earth is this easy to do?

1. You are 75/25
2. Uh oh, crash!
3. Now you are 50/50 (equities tanked you know)
4. So you relance into 95/5
5. Yay recovery!
6. Now you are 97/3 (that's how it works)
7. Time to get back to 75/25

I mean, i guess I get it. But it relies on a) knowing when step 2 is done, otherwise you send good money after bad and b) knowing when 6 is done to cash out so you get the maximal return.

The real answer is that the person doing this should be 95/5 to begin with, since they are taking huge risks when things look bleak. Ergo, they have the stomach for it.
The steps you described are accurate. However, a) is not correct - you don't have to snipe the bottom; you just start buying after the S&P goes -10% or some threshold like that, that's pretty much it.

As far as b), the poster rebalances once the S&P500 renews ATH I believe.

This method probably trails being 95/5 the whole time, but what's nice about it is your "normal" allocation is quite resilient at 75/25.
If you’re going to do such an approach there must be an algorithm trading product already available. Or just a human controlled one with set rules and triggers. Just invest in it.
I don't do it, I was just sharing what a poster here does.
85% US + FM | 15% Cash
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willthrill81
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Re: Market timer of 2007 2008 crash

Post by willthrill81 »

Firemenot wrote: Fri May 06, 2022 9:56 am
Marseille07 wrote: Fri May 06, 2022 9:48 am
ryman554 wrote: Fri May 06, 2022 8:38 am How on earth is this easy to do?

1. You are 75/25
2. Uh oh, crash!
3. Now you are 50/50 (equities tanked you know)
4. So you relance into 95/5
5. Yay recovery!
6. Now you are 97/3 (that's how it works)
7. Time to get back to 75/25

I mean, i guess I get it. But it relies on a) knowing when step 2 is done, otherwise you send good money after bad and b) knowing when 6 is done to cash out so you get the maximal return.

The real answer is that the person doing this should be 95/5 to begin with, since they are taking huge risks when things look bleak. Ergo, they have the stomach for it.
The steps you described are accurate. However, a) is not correct - you don't have to snipe the bottom; you just start buying after the S&P goes -10% or some threshold like that, that's pretty much it.

As far as b), the poster rebalances once the S&P500 renews ATH I believe.

This method probably trails being 95/5 the whole time, but what's nice about it is your "normal" allocation is quite resilient at 75/25.
If you’re going to do such an approach there must be an algorithm trading product already available. Or just a human controlled one with set rules and triggers. Just invest in it.
There are exceedingly few such instruments out there.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Candor
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Re: Market timer of 2007 2008 crash

Post by Candor »

willthrill81 wrote: Thu May 05, 2022 7:01 pm
HMSVictory wrote: Thu May 05, 2022 2:47 pm "I never met anyone who could successfully time the market. I never met anyone who ever met anyone who could successfully time the market" - Jack Bogle
Super ironic since he clearly did it himself in 2000.
The full quote:

“Sure, it’d be great to get out of stocks at the high and jump back in at the low. But in 55 years in the business, I not only have never met anybody who knew how to do it, I’ve never met anybody who had met anybody who knew how to do it.”
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus (341–270 BC)
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willthrill81
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Re: Market timer of 2007 2008 crash

Post by willthrill81 »

Candor wrote: Fri May 06, 2022 10:04 am
willthrill81 wrote: Thu May 05, 2022 7:01 pm
HMSVictory wrote: Thu May 05, 2022 2:47 pm "I never met anyone who could successfully time the market. I never met anyone who ever met anyone who could successfully time the market" - Jack Bogle
Super ironic since he clearly did it himself in 2000.
The full quote:

“Sure, it’d be great to get out of stocks at the high and jump back in at the low. But in 55 years in the business, I not only have never met anybody who knew how to do it, I’ve never met anybody who had met anybody who knew how to do it.”
I know that he said that, but he still timed the market himself by his own admission, though he didn't specifically refer to it as 'market timing'.
realitytruthprozac wrote: Thu Sep 30, 2010 7:50 pm p.105: That the dividend yield as 2000 began was at an all-time low of just 1% and the PE at a near record high of 32 times earnings together explain why the average return on stocks in the current decade is at present running at an annual rate of less than 1%.

p. 237: "But, in late 1999, concerned about the (obviously) speculative level of stock prices, I reduced my equities to about 35% of assets, thereby increasing my bond position to about 65%."
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“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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BolderBoy
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Re: Market timer of 2007 2008 crash

Post by BolderBoy »

pension4ever wrote: Thu May 05, 2022 2:28 pmDo we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...
I hadn't discovered the BHs in 2007. I handed over 90% of my portfolio to an advisor who all-but-promised to "make you a lot of money". From 2007-2010, the advisor market-timed like crazy with the hodge-podge of mutual funds, ETFs and individual stocks he'd selected.

I steadfastly invested from my paychecks (two jobs) into VG mutual funds (stock and bond) [this is the slowly part you're asking about] riding the market ever lower. People at work were saying that the end times are neigh. I kept saying, "This time isn't different!"

At the end of the experiment, the advisor was -40% while my 'meager & undisciplined' approach (slow and steady) was +40%. I scheduled a meeting with the advisor and pointed out that he could never catch up to me, that he was trying to time the market, pure-and-simple. He squealed like a pig in hot oil, pulled out reams of proof-of-his-superior-technique and I dumped him the next week. His fee for his malfeasance: 1.2% of AUM x 3 years. An expensive lesson for me.

A couple of months after moving everything back to VG I discovered the BHs and life has been smooth sailing ever since.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
placeholder
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Re: Market timer of 2007 2008 crash

Post by placeholder »

I developed my portfolio and invested a lot of cash in taxable in 2007 in time to catch the crash but I rebalanced did tax loss harvesting and invested new money according to my allocation plan.
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pension4ever
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Re: Market timer of 2007 2008 crash

Post by pension4ever »

4k moved from stable value to Sp500 Index fund.

LesGo.
ekid
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Re: Market timer of 2007 2008 crash

Post by ekid »

I took my wife's ROTH out of the market (went to cash at VG) in Oct 07. She is reluctant to even get more risky than FDIC-insured accts.

But I stayed in.

Bought her in in partially in Jan- fully, 100% equities when Buffet bought the railroad. April.

I'll never catch up to her now.
AnnetteLouisan
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Re: Market timer of 2007 2008 crash

Post by AnnetteLouisan »

I stayed the course in my 401k through March of 2020, but it was so short lived it hardly compares to 08-09. I had a very rough 08-09 though.
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pension4ever
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Re: Market timer of 2007 2008 crash

Post by pension4ever »

Bumping this thread. Will buy some more vti today.

Seems we like baby we are going down down down down
ekid
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Re: Market timer of 2007 2008 crash

Post by ekid »

pension4ever wrote: Mon May 09, 2022 8:50 am Bumping this thread. Will buy some more vti today.

Seems we like baby we are going down down down down
"Workin' in the coal mine..."
Valuethinker
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Re: Market timer of 2007 2008 crash

Post by Valuethinker »

MichRoots wrote: Thu May 05, 2022 3:00 pm Not trying to be a wet towel. But this is Bogleheads so wanted to take the emotion out of our buying/selling.

https://www.aei.org/carpe-diem/more-evi ... ant-do-it/

With that said, I remember someone saying in 2009 that "this time it is different, the market is going to 0".... about a week later the market turned around and the SP gained about 50% in a month or so. The inflation of today reminds me somewhat of 2007-2008. Things were crazy and didn't make sense. Gas was going to high and something was going to break. But it seems those times were much worse and some believed the entire financial system was going to collapse. And while the market dropped from SP 1500 to 666, it did recover back to 1000 pretty quickly. So a 33% drop in SP 500 might be fair today. We are already down 14% so I have been deploying a higher % into SP500 each week we have a huge drop. Its not that I am a market timer. It just helps me sleep better at night.
I don't believe the market went up anything like 50% in one week. Not even at the darkest days.

The 2012 downturn was pretty scary too - forgotten now in the narrative. Also the 2010-12 Eurozone Crisis as a whole.
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