Why is 'Timing' the market bad ?
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whenever I am thinking of selling a stock, I think to myself, why am I selling it? and what I am going to do with the money?
If I can't answer those two question I leave it where it is.0 -
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Or perhaps that a switch from 100% tracker to 50% doubly leveraged tracker and 50% fixed interest won't roughly match or beat the former but with lower volatility?
Do you do this? A quick Google comes up with lots of references showing that long term holding of leveraged funds is a seriously bad idea and wont do what one may think it would.
http://www.etf.com/etf-education-center/21044-leveraged-and-inverse-etfs-why-2x-is-not-the-2x-you-think.html
http://finance.yahoo.com/news/7-mistakes-avoid-trading-leveraged-130053722.html
Are they wrong? If so why?0 -
What has that got to do with the issue? Hussmann makes a perfectly sensible case for a market bust in the near future. If you don't like his argument just show us the flaws.
It's not so much that his argument has flaws but that his argument would have been equally valid in every single one of the last 5 years.
The headline ("When Speculators Prosper Through Ignorance") says it all. I'd rather be ignorant and prosperous (along with all the other sheeple who invest for the long term through both downs and ups) than clever and poor, thank you.0 -
People can - and often do - make a perfectly sensible case for what the market will do.
Hussmann himself uses examples (subsequently proved wrong) at the beginning of the article.
The problem is that (as his own cited examples show), no matter how well-reasoned and thorough the assessment of the economic environment, and no matter how well thought-out the consequent prediction of what will happen to the market as a result, the market may not be listening, and probably isn't.I am one of the Dogs of the Index.0 -
Even if there is an equity drop of 30%-50%, they will go back up again.0
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That's easy to say now...
..not so easy when you've never experienced that sort of stock market carnage, the sky is falling in, walls are shaking, the ten o'clock news is wall to wall doom and gloom every night, your portfolio is many thousands in the red and everyone is predicting a long grinding road back.
You can hardly sleep with worry about how long it might take to recover this time as the losses mount and you start debating whether it's better to get out now before it sinks another five or ten grand then you can always buy back in when it does.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
That's easy to say now...
..not so easy when you've never experienced that sort of stock market carnage, the sky is falling in, walls are shaking, the ten o'clock news is wall to wall doom and gloom every night, your portfolio is many thousands in the red and everyone is predicting a long grinding road back.
You can hardly sleep with worry about how long it might take to recover this time as the losses mount and you start debating whether it's better to get out now before it sinks another five or ten grand then you can always buy back in when it does.
The worst thing you can possibly do is sell. So "getting out now" is not an option.
After the last crash in 2007/8 or whenever it was, my house in London went down in value 40% (or so I heard). I had people whistling when I told them. They thought it was serious and a real loss.
It made absolutely no odds to me. I had no intention of selling, and I KNEW it would go back up in value and exceed where it had been. I know that in the future my house will be worth double, or triple what it is today. It's just a matter of time.
Stocks are exactly the same.0 -
That's fine then, I'm just offering some food for thought to other readers who've perhaps only experienced recent year on year gains of some magnitude and aren't prepared for gut wrenching valuations when it all starts to kick off.Stocks are exactly the same.
They're quite clearly not.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
That's fine then, I'm just offering some food for thought to other readers who've perhaps only experienced recent year on year gains of some magnitude and aren't prepared for gut wrenching valuations when it all starts to kick off.
They're quite clearly not.
House prices have gone up broadly in line with stocks over the years.0
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