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Market timing is just gambling:

gman57
edited November 4 in Fund Discussions
One more post that timing the market is just gambling:

I reduced my equity holdings from 45% to 30% over the summer thinking things were too overvalued and told myself I will not buy until October which is normally not a good month. FOMO was hard as everything was going higher and higher just about EVERY day but I wasn't going to budge! I apologize for not alerting the board that I was going back to 45% November 3rd. The last 2 days are just a slap in the face which as we all know happens to all of us. Down days after a big purchase. I will follow my asset allocation plan, I will follow my asset allocation plan. I will continue to type that 100 times as punishment for bad behavior. UGH

Comments

  • JD_co
    It's human nature to want to protect what you have built. It works against us sometimes, no doubt.

  • Observant1
    edited November 4
    Thanks for sharing your story but don't be too hard on yourself.
    Many extraordinary events have occurred this year which potentially
    could — and still may — destabilize equity markets.
  • racqueteer
    Whenever we buy something, barring those with recurring fixed increments, we're guessing. Hopefully, with at least some reasoning and logic involved. It's all a matter of degree.
  • MarkMark
    If it makes you feel any better (and I'm doubtful) even the most savvy get it wrong sometimes. See BRK and its investment in AAPL. Granted they made a huge pile while they held it but look what's happened since they started selling.
  • DrVenture
    edited November 5
    I have had better luck increasing my buying at a perceived bottom, than selling at a perceived top. But, I feel your pain.

    My current thesis is that this AI spending splurge is going to drive everything higher for a while. AI stocks directly, supporting stocks, then everything else as we get closer to the top.

    I do fear a big reckoning at some point. When that comes is the big unknown.

  • sma3
    The only thing that I think makes sense intellectually is to

    1) Keep enough in cash or FI so you do not have to sell during a market crash to pay your current bills and anything else you will need in the X number of years you conservatively believe it will take to recover.

    2) many people's recommendation for the duration of the former in #1, I think is much too short. 3 years or five years etc pales in the light of the 11 years it took SP500 to to completely recover from 2000

    3) If you have sold in a panic during previous crashes, you have too much in equities

    4) Diversify and realize your starting valuations are a very good measure of the returns you can expect going forward.`Buying the SP500 today has a low chance of being a good investment in the next five years.

    5) Take the money you need to live on from the best preforming investment. ie if the SP500 is within 5% of it's all time high sell that.
  • gman57
    edited November 5
    I'm in the 120 minus your age in equities mindset so I have plenty of cash/bonds. I have had a plan for several years now but have deviated a little from it at times. I need to follow it and not deviate as much. Easier said than done when most days you poke around various websites reading financial information but I'm getting better and better at sticking to it.
  • Old_JoeOld_Joe
    Yeah, the markets beckon like a Vegas slot. Hard to resist sometimes. I recently threw in a couple of thousand just to see what would happen. So far, it's just like Vegas- disappearing, ever so slowly.

    Oh well...
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