Am I timing the market?

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tomwood
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Am I timing the market?

Post by tomwood » Sat Mar 21, 2020 11:19 pm

I’m fortunate to have a job that hasn’t and likely won’t be changing during this current US shutdown. For years I’ve been investing using a 3-fund portfolio and holding a set AA, only changing incrementally each year as I rebalance to hold 1% more bonds as I age. My assumption is that I’ll work and continue to invest for 25-30 more years. With that time horizon it would appear to me that US Stocks have recently, and quickly, gone on sale. It’s possible the sale has already ended and possible the sale will be better in the coming weeks or months or years, but regardless of short term volatility, it appears today’s stock price is a bargain compared to the price a couple decades from now. And if that projection is likely, should someone such as myself try to find a little extra cash and pull the expenses unusually tight in the short term to toss some extra money into tax advantage accounts, investing all new money into 100% TSM, or is that a market timing error similar to what one might be making who’s selling low in recent days?

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Cubicle
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Re: Am I timing the market?

Post by Cubicle » Sat Mar 21, 2020 11:30 pm

I don't think this is timing because there is no dependency on emotion or feeling.

If you have a steadfast plan to always invest money at specified time periods, but then want to add extra when possible, I think that's okay.

Market timing to me also intrinsically has a sale component to it. If you are extra buying now to hold for years, that's simply taking advantage of sale/clearance pricing.
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willthrill81
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Re: Am I timing the market?

Post by willthrill81 » Sat Mar 21, 2020 11:32 pm

Who cares whether it's timing or not? I'm dead serious.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

dru808
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Re: Am I timing the market?

Post by dru808 » Sat Mar 21, 2020 11:46 pm

If it is market timing, it’s probably the least worst form of market timing. I’d say do it if you want.
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Snuffycuts99
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Re: Am I timing the market?

Post by Snuffycuts99 » Sat Mar 21, 2020 11:49 pm

I don't think it's ever a bad thing to trim expenses and buy VTSAX with the trimmings. But I'm a frugal guy :)

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windaar
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Re: Am I timing the market?

Post by windaar » Sun Mar 22, 2020 5:49 am

tomwood wrote:
Sat Mar 21, 2020 11:19 pm
it appears today’s stock price is a bargain compared to the price a couple decades from now.
We can’t know the prices a couple of decades from now. After 3 decades the Japanese Nikki has never regained its high reached in 1989.
Nobody knows nothing.

Keenobserver
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Re: Am I timing the market?

Post by Keenobserver » Sun Mar 22, 2020 5:54 am

windaar wrote:
Sun Mar 22, 2020 5:49 am
tomwood wrote:
Sat Mar 21, 2020 11:19 pm
it appears today’s stock price is a bargain compared to the price a couple decades from now.
We can’t know the prices a couple of decades from now. After 3 decades the Japanese Nikki has never regained its high reached in 1989.
I see the Japanese example come up.every now and again. If we are to base our investment philosphy on that, then we ought never to invest in anything ever.

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arcticpineapplecorp.
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Re: Am I timing the market?

Post by arcticpineapplecorp. » Sun Mar 22, 2020 5:57 am

what are your alternatives? compare them and determine what you think is best given the circumstances.

fwiw I am buying the total global stock market. I have since 1998 (actually technically didn't learn about international until 2013), and will continue for the next 20 years. (I also own the total U.S. bond market index fund, have an emergency fund and am vested in state retirement system, i.e., pension, get some tax benefit from a rental property, etc). In other words, be properly diversified. (I don't own gold, silver, bitcoin or any speculative enterprise). That's the best you can do, right? Keep on keepin on. Stay the course.

Regarding the Japanese example, that's why you should own global stocks and not just your own stock market. From 2000-2009 you would have had better returns owning ANY percentage of total international alongside total U.S. stock market index fund. Say it again, diversification is your friend.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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windaar
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Re: Am I timing the market?

Post by windaar » Sun Mar 22, 2020 6:04 am

Keenobserver wrote:
Sun Mar 22, 2020 5:54 am
windaar wrote:
Sun Mar 22, 2020 5:49 am
tomwood wrote:
Sat Mar 21, 2020 11:19 pm
it appears today’s stock price is a bargain compared to the price a couple decades from now.
We can’t know the prices a couple of decades from now. After 3 decades the Japanese Nikki has never regained its high reached in 1989.
I see the Japanese example come up.every now and again. If we are to base our investment philosphy on that, then we ought never to invest in anything ever.
Well not quite, since plenty of people have made money in the Nikki since then. It is just an example that markets can be stubborn and unpredictable and that cycles can take a while. And that nothing is guaranteed. In the USA it took until 1954 to get back to the 1929 peak.
Nobody knows nothing.

GoldenFinch
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Re: Am I timing the market?

Post by GoldenFinch » Sun Mar 22, 2020 6:25 am

Where are you finding the little extra cash? If it’s from less spending or your couch cushions or cash you have been watching collect dust for some reason that may be different than if it is from your emergency fund.

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nps
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Re: Am I timing the market?

Post by nps » Sun Mar 22, 2020 6:36 am

I do this every month. Invest extra cash in stocks. Your expenses may have already dropped as a result of lack of eating out, many paid entertainment and recreation options, etc. I know ours have. I don't consider it market timing.

Even if you usually invest new money according to your AA and are now looking at investing just in stocks, that can be a normal method of rebalancing if your allocations have gotten off course.

student
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Re: Am I timing the market?

Post by student » Sun Mar 22, 2020 6:41 am

It may or may not be market timing but I see no reasons not to do it. It seems that you are cutting expenses to buy stocks.

dcabler
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Re: Am I timing the market?

Post by dcabler » Sun Mar 22, 2020 6:45 am

willthrill81 wrote:
Sat Mar 21, 2020 11:32 pm
Who cares whether it's timing or not? I'm dead serious.
+1 People get too hung up on that term, in my opinion. I've seen everything from rebalancing to buy-and-hold called "market timing".

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HanSolo
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Re: Am I timing the market?

Post by HanSolo » Sun Mar 22, 2020 6:46 am

Keenobserver wrote:
Sun Mar 22, 2020 5:54 am
windaar wrote:
Sun Mar 22, 2020 5:49 am
tomwood wrote:
Sat Mar 21, 2020 11:19 pm
it appears today’s stock price is a bargain compared to the price a couple decades from now.
We can’t know the prices a couple of decades from now. After 3 decades the Japanese Nikki has never regained its high reached in 1989.
I see the Japanese example come up.every now and again. If we are to base our investment philosphy on that, then we ought never to invest in anything ever.
I disagree. Windaar merely said "we don't know." It's not a prediction, just a fact that we don't know the future. I think the "Bogleheads answer" would be to make sure you're informed about the uncertainties, estimate your risk tolerance, and then invest accordingly.

Now, back to the OP's question:
tomwood wrote:
Sat Mar 21, 2020 11:19 pm
is that a market timing error similar to what one might be making who’s selling low in recent days?
I think the "Bogleheads answer" would be to know your target stock/bond allocation and stay near that. I might add that if you want to stray from it, then at least recognize that upfront, understand the risks and your reasons for accepting those risks, and then do what you do.

Personally, after steep market losses, I'm more skeptical of the sellers than the buyers. I've never heard of a winning strategy that involves getting out of the market whenever it's 30% down.

Good luck.

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tomwood
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Re: Am I timing the market?

Post by tomwood » Sun Mar 22, 2020 8:36 am

willthrill81 wrote:
Sat Mar 21, 2020 11:32 pm
Who cares whether it's timing or not? I'm dead serious.
A good point. Though I’m associating market timing with a negative investment action. So my OP might be better asking if the idea of putting more money into stocks (one chunk in the coming days) is a positive action or would the BHs recommend investing every couple weeks into my desired AA as I’ve been doing for years?

Triple digit golfer
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Re: Am I timing the market?

Post by Triple digit golfer » Sun Mar 22, 2020 8:50 am

I think it's only market timing because you're putting it all to only one fund. Why not international too? Presumably you're bond heavy now if you haven't rebalanced. So why not put the extra savings to both U.S. and international equities until you're back in balance?

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Wiggums
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Re: Am I timing the market?

Post by Wiggums » Sun Mar 22, 2020 9:08 am

tomwood wrote:
Sat Mar 21, 2020 11:19 pm
I’m fortunate to have a job that hasn’t and likely won’t be changing during this current US shutdown. For years I’ve been investing using a 3-fund portfolio and holding a set AA, only changing incrementally each year as I rebalance to hold 1% more bonds as I age. My assumption is that I’ll work and continue to invest for 25-30 more years. With that time horizon it would appear to me that US Stocks have recently, and quickly, gone on sale. It’s possible the sale has already ended and possible the sale will be better in the coming weeks or months or years, but regardless of short term volatility, it appears today’s stock price is a bargain compared to the price a couple decades from now. And if that projection is likely, should someone such as myself try to find a little extra cash and pull the expenses unusually tight in the short term to toss some extra money into tax advantage accounts, investing all new money into 100% TSM, or is that a market timing error similar to what one might be making who’s selling low in recent days?
I’m retired and I continue to buy weekly. Time in the market and your savings rate make the biggest difference. Hopefully, you sre macing out your accounts.

chevca
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Re: Am I timing the market?

Post by chevca » Sun Mar 22, 2020 9:12 am

windaar wrote:
Sun Mar 22, 2020 5:49 am
tomwood wrote:
Sat Mar 21, 2020 11:19 pm
it appears today’s stock price is a bargain compared to the price a couple decades from now.
We can’t know the prices a couple of decades from now. After 3 decades the Japanese Nikki has never regained its high reached in 1989.
On the other end of that... the Jan/Feb market highs will likely be bargains compared to the price 20 years from now. Why weren't you skimping and investing then, OP?

I don't think it's market timing to try and come up with some extra cash to invest. It's not like you were sitting on this cash. But, I don't see any reason to do it either. Looking for little ways to cut expenses to invest... how much can we be talking, really?

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willthrill81
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Re: Am I timing the market?

Post by willthrill81 » Sun Mar 22, 2020 10:08 am

tomwood wrote:
Sun Mar 22, 2020 8:36 am
willthrill81 wrote:
Sat Mar 21, 2020 11:32 pm
Who cares whether it's timing or not? I'm dead serious.
A good point. Though I’m associating market timing with a negative investment action. So my OP might be better asking if the idea of putting more money into stocks (one chunk in the coming days) is a positive action or would the BHs recommend investing every couple weeks into my desired AA as I’ve been doing for years?
If you truly believe that stocks are currently on sale, then temporarily increasing your contributions is not a problem, regardless as to what label someone wants to slap on it. In general, few BHs will sling mud at someone who is increasing their saving rate.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

cashboy
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Re: Am I timing the market?

Post by cashboy » Sun Mar 22, 2020 10:31 am

tomwood wrote:
Sat Mar 21, 2020 11:19 pm
should someone such as myself try to find a little extra cash and pull the expenses unusually tight in the short term to toss some extra money into tax advantage accounts, investing all new money into 100% TSM, or is that a market timing error similar to what one might be making who’s selling low in recent days?
it is not a 'market timing error' as one usually thinks of the term
- like someone selling at the bottom in recent days. you are simply adding to your portfolio.

as far as 'pull the expenses unusually tight' to buy now
- as long as you have in place, and do not touch, your emergency funds.

good luck to us all.
Last edited by cashboy on Sun Mar 22, 2020 10:33 am, edited 1 time in total.
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1789
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Re: Am I timing the market?

Post by 1789 » Sun Mar 22, 2020 10:33 am

i am putting some extra cash on a weekly basis to buy TSM. I think this is not a bad idea for long term investing.
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ks289
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Re: Am I timing the market

Post by ks289 » Sun Mar 22, 2020 11:43 am

willthrill81 wrote:
Sun Mar 22, 2020 10:08 am
tomwood wrote:
Sun Mar 22, 2020 8:36 am
willthrill81 wrote:
Sat Mar 21, 2020 11:32 pm
Who cares whether it's timing or not? I'm dead serious.
A good point. Though I’m associating market timing with a negative investment action. So my OP might be better asking if the idea of putting more money into stocks (one chunk in the coming days) is a positive action or would the BHs recommend investing every couple weeks into my desired AA as I’ve been doing for years?
If you truly believe that stocks are currently on sale, then temporarily increasing your contributions is not a problem, regardless as to what label someone wants to slap on it. In general, few BHs will sling mud at someone who is increasing their saving rate.
The bogleheads investment philosophy covers when one should invest (early and often). As you know, the belief that market timing is a suboptimal long term strategy is a core element of the bogleheads investment philosophy as well:

#4Never 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.
————

I think that being dogmatic is helpful to the vast majority of investors (especially me), since I don’t believe that most can identify an approach which outperforms the market, nor do most have the time to dedicate to that pursuit.

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willthrill81
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Re: Am I timing the market

Post by willthrill81 » Sun Mar 22, 2020 11:47 am

ks289 wrote:
Sun Mar 22, 2020 11:43 am
willthrill81 wrote:
Sun Mar 22, 2020 10:08 am
tomwood wrote:
Sun Mar 22, 2020 8:36 am
willthrill81 wrote:
Sat Mar 21, 2020 11:32 pm
Who cares whether it's timing or not? I'm dead serious.
A good point. Though I’m associating market timing with a negative investment action. So my OP might be better asking if the idea of putting more money into stocks (one chunk in the coming days) is a positive action or would the BHs recommend investing every couple weeks into my desired AA as I’ve been doing for years?
If you truly believe that stocks are currently on sale, then temporarily increasing your contributions is not a problem, regardless as to what label someone wants to slap on it. In general, few BHs will sling mud at someone who is increasing their saving rate.
The bogleheads investment philosophy covers when one should invest (early and often). As you know, the belief that market timing is a suboptimal long term strategy is a core element of the bogleheads investment philosophy as well:

#4Never 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.
————

I think that being dogmatic is helpful to the vast majority of investors (especially me), since I don’t believe that most can identify an approach which outperforms the market, nor do most have the time to dedicate to that pursuit.
Since I wasn't espousing timing in my post, I'm confused by your post. Are you saying that it is a bad idea for the OP to temporarily increase his saving rate?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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BolderBoy
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Re: Am I timing the market?

Post by BolderBoy » Sun Mar 22, 2020 11:51 am

tomwood wrote:
Sat Mar 21, 2020 11:19 pm
... or is that a market timing error similar to what one might be making who’s selling low in recent days?
Probably not market timing. Classic market timing is jumping in/out of cash based on market direction guesses. Doesn't sound like you are doing that.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

ks289
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Re: Am I timing the market

Post by ks289 » Sun Mar 22, 2020 11:55 am

willthrill81 wrote:
Sun Mar 22, 2020 11:47 am
ks289 wrote:
Sun Mar 22, 2020 11:43 am
willthrill81 wrote:
Sun Mar 22, 2020 10:08 am
tomwood wrote:
Sun Mar 22, 2020 8:36 am
willthrill81 wrote:
Sat Mar 21, 2020 11:32 pm
Who cares whether it's timing or not? I'm dead serious.
A good point. Though I’m associating market timing with a negative investment action. So my OP might be better asking if the idea of putting more money into stocks (one chunk in the coming days) is a positive action or would the BHs recommend investing every couple weeks into my desired AA as I’ve been doing for years?
If you truly believe that stocks are currently on sale, then temporarily increasing your contributions is not a problem, regardless as to what label someone wants to slap on it. In general, few BHs will sling mud at someone who is increasing their saving rate.
The bogleheads investment philosophy covers when one should invest (early and often). As you know, the belief that market timing is a suboptimal long term strategy is a core element of the bogleheads investment philosophy as well:

#4Never 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.
————

I think that being dogmatic is helpful to the vast majority of investors (especially me), since I don’t believe that most can identify an approach which outperforms the market, nor do most have the time to dedicate to that pursuit.
Since I wasn't espousing timing in my post, I'm confused by your post. Are you saying that it is a bad idea for the OP to temporarily increase his saving rate?
You asked in an earlier post “who cares whether it’s timing or not?” The answer I gave is that many around here have an opinion about it because most don’t believe that timing is a wise long term strategy and would discourage it except for those with special talents or insider knowledge.

About increasing one’s savings rate - sure it fits with the investment philosophy of investing (saving) whenever you have the money available to do so.

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willthrill81
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Re: Am I timing the market

Post by willthrill81 » Sun Mar 22, 2020 11:57 am

ks289 wrote:
Sun Mar 22, 2020 11:55 am
willthrill81 wrote:
Sun Mar 22, 2020 11:47 am
ks289 wrote:
Sun Mar 22, 2020 11:43 am
willthrill81 wrote:
Sun Mar 22, 2020 10:08 am
tomwood wrote:
Sun Mar 22, 2020 8:36 am


A good point. Though I’m associating market timing with a negative investment action. So my OP might be better asking if the idea of putting more money into stocks (one chunk in the coming days) is a positive action or would the BHs recommend investing every couple weeks into my desired AA as I’ve been doing for years?
If you truly believe that stocks are currently on sale, then temporarily increasing your contributions is not a problem, regardless as to what label someone wants to slap on it. In general, few BHs will sling mud at someone who is increasing their saving rate.
The bogleheads investment philosophy covers when one should invest (early and often). As you know, the belief that market timing is a suboptimal long term strategy is a core element of the bogleheads investment philosophy as well:

#4Never 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.
————

I think that being dogmatic is helpful to the vast majority of investors (especially me), since I don’t believe that most can identify an approach which outperforms the market, nor do most have the time to dedicate to that pursuit.
Since I wasn't espousing timing in my post, I'm confused by your post. Are you saying that it is a bad idea for the OP to temporarily increase his saving rate?
You asked in an earlier post “who cares whether it’s timing or not?” The answer I gave is that many around here have an opinion about it because most don’t believe that timing is a wise long term strategy and would discourage it except for those with special talents or insider knowledge.

About increasing one’s savings rate - sure it fits with the investment philosophy of investing (saving) whenever you have the money available to do so.
My point was in this specific situation, it doesn't matter whether someone wants to label it timing or not. I never espoused timing as a strategy. As you've noted, increasing one's saving rate is not timing, even if a few hardcore zealots want to label it as such.

dcabler noted precisely what I was trying to convey. Some are afraid that the slightest move will be 'timing' and wreck their strategy. There's no need for that.
dcabler wrote:
Sun Mar 22, 2020 6:45 am
People get too hung up on that term, in my opinion. I've seen everything from rebalancing to buy-and-hold called "market timing".
Last edited by willthrill81 on Sun Mar 22, 2020 11:59 am, edited 1 time in total.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

MishkaWorries
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Re: Am I timing the market?

Post by MishkaWorries » Sun Mar 22, 2020 11:58 am

We upped our 401k contributions and went 100% future contributions instead of rebalancing.

We're very frugal except we like to travel 2-3 times per year. We've missed our spring trip and I don't see summer happening either. So we've saved a good chunk already this year.

I just can't see how it is ever a bad idea to save more money and put it to work. Unless you think the market will be lower than now. But even then no problem saving more and putting in CDs, etc.

To rephrase a previous Commenter. Who cares what the reason that triggers an increase in savings.
We plan. G-d laughs.

ks289
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Re: Am I timing the market

Post by ks289 » Sun Mar 22, 2020 12:13 pm

willthrill81 wrote:
Sun Mar 22, 2020 11:57 am
ks289 wrote:
Sun Mar 22, 2020 11:55 am
willthrill81 wrote:
Sun Mar 22, 2020 11:47 am
ks289 wrote:
Sun Mar 22, 2020 11:43 am
willthrill81 wrote:
Sun Mar 22, 2020 10:08 am


If you truly believe that stocks are currently on sale, then temporarily increasing your contributions is not a problem, regardless as to what label someone wants to slap on it. In general, few BHs will sling mud at someone who is increasing their saving rate.
The bogleheads investment philosophy covers when one should invest (early and often). As you know, the belief that market timing is a suboptimal long term strategy is a core element of the bogleheads investment philosophy as well:

#4Never 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.
————

I think that being dogmatic is helpful to the vast majority of investors (especially me), since I don’t believe that most can identify an approach which outperforms the market, nor do most have the time to dedicate to that pursuit.
Since I wasn't espousing timing in my post, I'm confused by your post. Are you saying that it is a bad idea for the OP to temporarily increase his saving rate?
You asked in an earlier post “who cares whether it’s timing or not?” The answer I gave is that many around here have an opinion about it because most don’t believe that timing is a wise long term strategy and would discourage it except for those with special talents or insider knowledge.

About increasing one’s savings rate - sure it fits with the investment philosophy of investing (saving) whenever you have the money available to do so.
My point was in this specific situation, it doesn't matter whether someone wants to label it timing or not. I never espoused timing as a strategy. As you've noted, increasing one's saving rate is not timing, even if a few hardcore zealots want to label it as such.

dcabler noted precisely what I was trying to convey. Some are afraid that the slightest move will be 'timing' and wreck their strategy. There's no need for that.
dcabler wrote:
Sun Mar 22, 2020 6:45 am
People get too hung up on that term, in my opinion. I've seen everything from rebalancing to buy-and-hold called "market timing".
I get it.
Except that in this specific situation OP not only wants to save more but ALSO wants to POSSIBLY switch from prior asset allocation which was certain % bonds ( and increasing by 1% per year) to now 100% equities for new contributions.

It is possible that making this change to current contributions would either not make a dent in asset allocation, restore the prior asset allocation, over balance, or over over balance depending on the amounts.

I’ve changed my new contributions from 100% bonds to 100% stocks, but I’m still half a million short of restoring 54:46 so I’m selling a crap load of bonds also.

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tomwood
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Re: Am I timing the market?

Post by tomwood » Sun Mar 22, 2020 6:00 pm

BolderBoy wrote:
Sun Mar 22, 2020 11:51 am
tomwood wrote:
Sat Mar 21, 2020 11:19 pm
... or is that a market timing error similar to what one might be making who’s selling low in recent days?
Probably not market timing. Classic market timing is jumping in/out of cash based on market direction guesses. Doesn't sound like you are doing that.
:beer

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tomwood
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Re: Am I timing the market

Post by tomwood » Sun Mar 22, 2020 8:29 pm

ks289 wrote:
Sun Mar 22, 2020 12:13 pm
I’ve changed my new contributions from 100% bonds to 100% stocks, but I’m still half a million short of restoring 54:46 so I’m selling a crap load of bonds also.
Is the only reason your switching to 100% bonds because your AA has changed?

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Re: Am I timing the market?

Post by tomwood » Sun Mar 22, 2020 9:02 pm

MishkaWorries wrote:
Sun Mar 22, 2020 11:58 am
We upped our 401k contributions and went 100% future contributions instead of rebalancing.
100% TSM for all your future contributions?

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grabiner
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Re: Am I timing the market?

Post by grabiner » Mon Mar 23, 2020 10:15 am

If you increase your stock allocation now, and plan to decrease it later based on future events, that is market timing; your success is based on your outguessing other investors' market expectations.

If you increase your stock allocation now, and stay there for good (until personal events such as approaching retirement require you to change), that is not market timing, and may be a good move based on a change in your risk tolerance. This is what I did after my first bear market in 2000-2002; I increased my stock allocation in 2002 and 2004, and kept that risk level in the 2007-2009 market crash and the current crash (just rebalanced two weeks ago).
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Re: Am I timing the market?

Post by HomerJ » Mon Mar 23, 2020 10:31 am

windaar wrote:
Sun Mar 22, 2020 6:04 am
Keenobserver wrote:
Sun Mar 22, 2020 5:54 am
windaar wrote:
Sun Mar 22, 2020 5:49 am
tomwood wrote:
Sat Mar 21, 2020 11:19 pm
it appears today’s stock price is a bargain compared to the price a couple decades from now.
We can’t know the prices a couple of decades from now. After 3 decades the Japanese Nikki has never regained its high reached in 1989.
I see the Japanese example come up.every now and again. If we are to base our investment philosphy on that, then we ought never to invest in anything ever.
Well not quite, since plenty of people have made money in the Nikki since then. It is just an example that markets can be stubborn and unpredictable and that cycles can take a while. And that nothing is guaranteed. In the USA it took until 1954 to get back to the 1929 peak.
FYI, that's price only. If you include dividends (which were a lot larger back then), an investor was back to even a LOT sooner than 1954
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Re: Am I timing the market

Post by ks289 » Wed Mar 25, 2020 12:25 pm

tomwood wrote:
Sun Mar 22, 2020 8:29 pm
ks289 wrote:
Sun Mar 22, 2020 12:13 pm
I’ve changed my new contributions from 100% bonds to 100% stocks, but I’m still half a million short of restoring 54:46 so I’m selling a crap load of bonds also.
Is the only reason your switching to 100% bonds because your AA has changed?
yes-
AA changed and needed major stock purchases to restore prior AA

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Re: Am I timing the market?

Post by tomwood » Thu Mar 26, 2020 3:38 pm

grabiner wrote:
Mon Mar 23, 2020 10:15 am
If you increase your stock allocation now, and plan to decrease it later based on future events, that is market timing; your success is based on your outguessing other investors' market expectations.

If you increase your stock allocation now, and stay there for good (until personal events such as approaching retirement require you to change), that is not market timing, and may be a good move based on a change in your risk tolerance. This is what I did after my first bear market in 2000-2002; I increased my stock allocation in 2002 and 2004, and kept that risk level in the 2007-2009 market crash and the current crash (just rebalanced two weeks ago).
That’s a good way to think of it.
Now that I have some evidence to suggest I won’t even consider selling low when we have a drop in the market (at least the short term drop ive so far experienced), am I correct to assume you’re saying I might be in a good spot to invest more in equities long term. That is to say, rather than age in bonds, maybe 2/3 * age in bonds, or something like that?

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