How to Time Market Exits and Re-Entries (NYT)

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bigH
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How to Time Market Exits and Re-Entries (NYT)

Postby bigH » Sat Feb 28, 2009 5:53 pm

http://finance.yahoo.com/retirement/art ... s-Now-What?

Is this article serious? When will people learn that trading is not investing. I'll lost what little respect I had for media and NYT with this article.

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Adrian Nenu
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Postby Adrian Nenu » Sat Feb 28, 2009 6:46 pm

“Market timing requires two smart moves,” said Bruce R. Barton, a financial planner in San Jose, Calif. “Getting out ahead of a drop. And getting back in before the recovery.”


- the inverted yield curve indicates recessions which mean rising risk which means the portfolio risk exposure needs adjustment. Maybe get out of equities completely.

- there are two options for getting back in: a. DCA back in because we can't time the bottom and b. get back in when the leading economic indicators show economic recovery is on the way. The market would have already reacted so some of the upside will be missed. Anyway, getting back in is a more difficult decision than getting out.

- money to be used to buy a house has a much shorter time horizon than retirement money so it should never be invested in stocks. Liquidity and safety should be the top concerns.

Adrian
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Wagnerjb
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Postby Wagnerjb » Sat Feb 28, 2009 7:01 pm

From the article:

In October of that year they sat down for a serious talk. Ms. Mickus had once lost a lot of money in the tech bubble, and the prospect of losing their down payment made Mr. Mickus nervous. “I wanted to pull everything out then; Taryn wanted to keep it all in,” he said. They compromised, cashing in 60 percent of their stocks that fall — just before the Dow began its slide.



Michael Roden, a consultant to the Department of Defense from the Leesburg, Va., area, joined the ranks of the cash rich after a sense of déjà vu washed over him in August 2007, as the markets continued their steep climb. “I had taken quite a bath when the tech bubble burst,” he said. “I would never let that happen again.”

With his 2002 drubbing in mind, he started with some profit taking in the summer of 2007, but as the market turned he kept liquidating his investments in an orderly retreat. But he was not quite fast enough.


See a common thread? People who chased performance in the Tech bubble and got hammered.

At best, these guys are batting 50%. But that assumes they got back into the stock market right away in early 2003....which is doubtful. Hmmm, even the "lucky ones" this time are undoubtedly net losers over a longer period. No thanks, I will stay away from market timing.

Best wishes.
Andy

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gatorking
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Timing

Postby gatorking » Sat Feb 28, 2009 7:14 pm

Actually, market timing requires only one smart move, getting back in below the point you got out :)

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Adrian Nenu
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Postby Adrian Nenu » Sat Feb 28, 2009 7:22 pm

Actually, market timing requires only one smart move, getting back in below the point you got out


The way things are going, that could be the next day! You can tax loss harvest on a daily basis. :wink:

Adrian
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SP-diceman
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Postby SP-diceman » Sat Feb 28, 2009 8:59 pm

Actually, market timing requires only one smart move, getting back in below the point you got out



So any market timing in the last decade has been successful.
(heh, heh)


Thanks
SP-diceman


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