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>>>>>Is it possible to predict the future? The short answer is 'No.' A market timer, however, believes it is possible to buy stocks or mutual funds at high prices and sell at low prices based upon their assessment of future market and economic activity.
Most would agree that market timing may be possible over short periods of time but it is more difficult to consistently and accurately predict stock market movements over long periods of time.<<<<<<
Amen to that!!! Back in the days I always hated when I was referred to as a market timer, especially since I have always been so vocal that markets in the short run can't be forecasted or predicted. Traders *react* while timers *predict*.
I thought that it was interesting that they classified even Buy and Hold as a form of market timing. Go figure.
First of all let's not call it Market Timing. This phrase has been bastardized no end. Timing the Market is not same thing as Market Timing. The former is about making decisions on when to buy and sell. The latter is about using non-public information to screw people over for one's benefit.
Second if I decide to stay in the market, I'm deciding to hold. Which is equivalent to buy. One is indeed Timing the Market. One is never Market Timing.
The referenced Kent Thune article, “10 Ways to Time the Market with Mutual Funds”, is a total disaster. It simply does not deliver on its promises in the title.
The author uses a very loose and broad definition of “market timing”. His opening sentence says much about his philosophy: “If you think about it for a moment, all investing is a form of market timing, even if you employ a buy-and-hold investing strategy”. I don’t see market timing in that broad and all-inclusive way.
The article is mostly definitional in character. It is devoid of data and of decision-aiding criteria. The piece does not establish a how-to-do set of functional rules. It never advises the reader how to identify the market signals that a rotation is potentially needed or what phase of the market cycle currently exists. I am disappointed with the nebulous nature of the whole article.
For example, many research papers are devoted to establishing market phase and those sectors that generate superior returns in each phase. Fidelity divides the cycle into 5 segments and suggests, based on historical data, which sector produces excess rewards. Here is a Link to a Fidelity introductory work:
This is a limited sampling of what is easily available. There is an endless list of research in this arena. Thune cited none of them. The referenced article is a lazy example of investment research and/or reporting. I'm unimpressed; we deserve better.
"lazy example of investment research" or "example of lazy investment research"? Maybe it's time that I started smoking...
You can either try and understand what I'm saying or understand why I'm trying so hard. Besides you never know with smoking. IT could clear your head. When the fog clears...
Comments
Most would agree that market timing may be possible over short periods of time but it is more difficult to consistently and accurately predict stock market movements over long periods of time.<<<<<<
Amen to that!!! Back in the days I always hated when I was referred to as a market timer, especially since I have always been so vocal that markets in the short run can't be forecasted or predicted. Traders *react* while timers *predict*.
I thought that it was interesting that they classified even Buy and Hold as a form of market timing. Go figure.
Second if I decide to stay in the market, I'm deciding to hold. Which is equivalent to buy. One is indeed Timing the Market. One is never Market Timing.
The referenced Kent Thune article, “10 Ways to Time the Market with Mutual Funds”, is a total disaster. It simply does not deliver on its promises in the title.
The author uses a very loose and broad definition of “market timing”. His opening sentence says much about his philosophy: “If you think about it for a moment, all investing is a form of market timing, even if you employ a buy-and-hold investing strategy”. I don’t see market timing in that broad and all-inclusive way.
The article is mostly definitional in character. It is devoid of data and of decision-aiding criteria. The piece does not establish a how-to-do set of functional rules. It never advises the reader how to identify the market signals that a rotation is potentially needed or what phase of the market cycle currently exists. I am disappointed with the nebulous nature of the whole article.
For example, many research papers are devoted to establishing market phase and those sectors that generate superior returns in each phase. Fidelity divides the cycle into 5 segments and suggests, based on historical data, which sector produces excess rewards. Here is a Link to a Fidelity introductory work:
https://www.fidelity.com/learning-center/trading-investing/markets-sectors/sector-rotation-introduction
S&P’s Sam Stovall has done yeoman duty in sector rotation analyses. Here is a nice summary column of his research that appeared in Seeking Alpha:
http://seekingalpha.com/article/464501-whats-ahead-sector-rotation-in-market-and-economic-cycles
This is a limited sampling of what is easily available. There is an endless list of research in this arena. Thune cited none of them. The referenced article is a lazy example of investment research and/or reporting. I'm unimpressed; we deserve better.
Best Regards.