Waiting For Crash Vs Staying Vested

[kage]

Really? Show me anyone who has consistently made money over the past 20 years using market timing. I knew that the market was bottoming in 2009 to 2010 but there is no way that I would have been able to consistently call other market bottoms.

I have watched the markets for over 30 years now and my experience and research has shown that it cannot be done.

If u cannot do it dosen't not mean others cannot do it, EDMW got alot of hidden dragons ...

 

[CookieMonsta88]

There was some website having an article a while back (maybe it's fool.sg?) showing the effects of timing the market vs being vested.

Of course both statistics shows the trade off of each choice (one missing out on dividend while the other missing out on larger capital gain).

Of course it's analysis showed that the end result not necessarily points towards timing the market.

Incidentally, I can't locate the article now. Oh well

That's if u are long only, if u are actively trading, bull market u go long make money, bear market u go short make money also, and profit twice somemore

 

[alexchia01]

Really? Show me anyone who has consistently made money over the past 20 years using market timing. I knew that the market was bottoming in 2009 to 2010 but there is no way that I would have been able to consistently call other market bottoms.

I have watched the markets for over 30 years now and my experience and research has shown that it cannot be done.

I agree with you that to date no one has consistently made money over the past 20 years using market timing.

This is because to be successful with market timing you need electronic charting and internet trading.

Internet trading only started somewhere in 1998, which to date, is less than 20 years. Also electronic charting only got sophisticated in the mid 21st century.

Based on what you said you have 30 years experience, which means you started at the time where all trading are done throught the phone and information are from TV or newspaper.

When trading was switch to internet base, many of these old timers have problem adapting.

Today, the trading world is dominated by young chaps who are fresh out of schools and they are smart, fast and eager to learn.

I don't have your 30 years experience, I only have 15 years. However, I'm lucky to start at the time where trading just gone electronic.

With technology, it took me 5 years to master the skill of market timing and more. I'm just sharing... Market timing is very possible if you are willing to learn and our next generation are going to be even better than us.

 

[CookieMonsta88]

I agree with you that to date no one has consistently made money over the past 20 years using market timing.

This is because to be successful with market timing you need electronic charting and internet trading.

Internet trading only started somewhere in 1998, which to date, is less than 20 years. Also electronic charting only got sophisticated in the mid 21st century.

Based on what you said you have 30 years experience, which means you started at the time where all trading are done throught the phone and information are from TV or newspaper.

When trading was switch to internet base, many of these old timers have problem adapting.

Today, the trading world is dominated by young chaps who are fresh out of schools and they are smart, fast and eager to learn.

I don't have your 30 years experience, I only have 15 years. However, I'm lucky to start at the time where trading just gone electronic.

With technology, it took me 5 years to master the skill of market timing and more. I'm just sharing... Market timing is very possible if you are willing to learn and our next generation are even going to be better than us.

There is Jesse Livermore and George Soros, they both traded when there are no electronic and internet, in Jesse Livermore's time charting is done by hand some more, but he can still time the markets

 

[wahkao3]

but yeah, dividends can be very important during weak market... if the market go sideways or downtrend... hard for capital gains... the dividends will help tide us through till recovery

no loh
come to bad market, company cash flow also affected, how can they pay dividend?

And also their share price will tank, usually going down more than the dividends they give

 

[steven168z]

this book is good highly recommend

Markets Never Forget (But People Do): How Your Memory Is Costing You Money-and Why This Time Isn't Different

http://www.amazon.com/Markets-Never-Forget-People-Money/dp/111809154X

 

[winorlose]

The Last, Great Run For The U.S. Dollar, The Death Of The Euro And 74 Trillion In Currency Derivatives At Risk | MND - Your Daily Dose of Counter-Theory

How? Exploded liao?

Like this monday all liquidate out

 

[w1rbelw1nd]

I agree with you that to date no one has consistently made money over the past 20 years using market timing.

This is because to be successful with market timing you need electronic charting and internet trading.

Internet trading only started somewhere in 1998, which to date, is less than 20 years. Also electronic charting only got sophisticated in the mid 21st century.

Based on what you said you have 30 years experience, which means you started at the time where all trading are done throught the phone and information are from TV or newspaper.

When trading was switch to internet base, many of these old timers have problem adapting.

Today, the trading world is dominated by young chaps who are fresh out of schools and they are smart, fast and eager to learn.

I don't have your 30 years experience, I only have 15 years. However, I'm lucky to start at the time where trading just gone electronic.

With technology, it took me 5 years to master the skill of market timing and more. I'm just sharing... Market timing is very possible if you are willing to learn and our next generation are going to be even better than us.

So.... next generation peeps are gonna earn high risk-adjusted profits than index investors, then who are the ones that earn low risk-adjusted profits? Suckers like myself that dont believe in trading?

 

[winorlose]

Old school investors just have to sit tight and wear diapers lo.

Flip newspaper the next day already too late.

 

[winorlose]

I think there is quite abit of fear now.. Brings me bk to 2007 sept..knn

Usdjpy carry trades headlines everyday.toxic mortgage back securities..then finally lehman bros hit the nail.

Usd carry trades now. Oil crisis. Euro crisis. Emerging mkt currencies crisis. Sg50 crisis. Which one give way first?

If sell now.. All preserve in cash..wait for 50% correction in 9-12mths time then all in.. Tio boh

Fear is really more contagious hahaha

Let me go visit uncle168 thread and let him 洗脑 abit hahaha

 

[lcornwisky]

there is no way to time the market....the only way is trading through skill

most of the time the fundamentals will be too late so best to focus on the technicals first then confirm with the news

 

[wondrdoggie]

I basically have 2 portfolio, one that I consider investment. It holds the bulk of my assets. For this portfolio, I don't do much timing as my timeframe is over many many years. At the start, I didn't believe I shouldn't time, so I tried holding back on a few buys. End up I was not invested when the markets moved differently from what I expected. Kicked myself. When you have a large portfolio, it's hard to time, most of the time, it will take a while to deploy your allocation anyway. Balance every 6 months is about all that needs to be done as certain strategies you are taking needs time to play out.

My other portfolio is my trading portfolio of stocks. That one is all about timing and stock picking. I have held off buying anything else for now and am keeping about 30% in cash. I got my eye on a few stocks to pick up if market dips.

Btw, I did pose this question to the private bankers about market timing. Their stand is for long term investors, there is no need to time the market. Exactly what shiny things said, we don't always get the timing right and in the longer run, your return averages out according to the portfolio mix anyway. Also, there are always ways to play the market whichever ways it runs. Don't always have to keep cash.

 

[eveee99]

but if sell out then market continues to chiong now?

maybe if u are worried, can slowly take profits and cut down your equity portion a bit?

Cut down abit aredi ... to 50% stocks 50% cash.... thinking of going to 30% and 70% ... still thinking though ...

 

[kletian]

My view on waiting for crash vs staying vested:

Tempting to wait for a 30-40% crash/significant correction but in the few months/ years waiting time, the market may gain more than the amount dropped in the crash. Plus you may be anchoring to the point where you first saw the index (at maybe 1500). Say the market rises to 2000/3000/4000 and afterwards your 'crash' towards 1600 comes. If the market don't 'crash' below 1500, then don't buy and later continue bull run no. 2 from 1600 how? When exactly do you decide to bottom fish?
On the other hand, people who are vested need to be able to tahan the correction and not cut loss at the worst possible time.

Anyway, I believe that looking at a long term horizon, even if the crash is tomorrow (worst case scenario), all-in today still has a very high chance of making you a profit 20 years later if you close your eyes and not cut losses at the bottom. That may not beat the market or even inflation but you probably beat holding cash for 20 years or net losing money due to many bad timed investments.

No right nor wrong answer, since it also depends on your objectives.

While I think staying vested is the better option compared to waiting for crash, I think it's still possible to time the market somewhat. Maybe on average (dunno how researchers calculate the average) people lose to market returns, but there are many who beat the market over the long term.

About market timing, from personal experience I learnt that:
1) No one can perfectly buy at the bottom and sell at the top
2) Won't be able to get the direction of the movement right 100%
3) Even if right direction 70% of the time, may still have sub-par returns compared to the market
4) Or if right 90% of the time in the past, maybe it's just luck (long 10 stocks in a bull market you probably guess the short term movements of 9 right?)

Still, it can be done with luck / skill / illegal stuff (insider info, connections, ++? etc). DCA + diversified portfolio + index investing won't turn 1M into 100M in 20 years' time. 1M into AAPL then TSLA would had... or in an alternate reality, one of the stock might have been GTAT

 

[felixleong]

When there are millions of investors and traders, the momentum is even bigger, and its even easier to time the crash and short it.

U how to know when the market will crash? When there is good news everyday and the market doesn't go up, means there is no more buyers left to buy into the news, and once they break the low, fear sets in, and everyone panic sells and u get a crash.

Market sentiment is the strongest indicator of all

There's so many ways to identify if a market will crash, just study penny stocks, its creating asset bubbles everyday.

So u tell me how to be unable to time the markets?

The study of the markets is the study of human nature, when u understand this, together with fundamental and technicals it will be easy to trade the markets easily

may I know how many market cycles have you been through?
did u manage to short big and make big during 2007?

 

[felixleong]

There is Jesse Livermore and George Soros, they both traded when there are no electronic and internet, in Jesse Livermore's time charting is done by hand some more, but he can still time the markets

Jesse Livermore - read about him before in this book

http://www.amazon.com/Reminiscences-Stock-Operator-Commentary-Livermore/dp/0470481595


think he when broke twice before, but in today's dollars he was a billionaire stock speculator, si bei power

really not easy to like him or george soros.. probably 1 in a million

 

[IronMac]

wow like that, how old are u?

Let's just say that I identify with Alex P. Keaton.

 

[IronMac]

but isn't it always good to keep spare cash on hand just in case a crash does happen so you can start buying more?

if you invest everything at one go , how will you have any cash to invest when a mini or a major crash really does happen?

As Shiny says, spare cash is a wasted opportunity.

To your question; A) have a job and therefore income coming in, B) dividends.

 

[IronMac]

then like that how much % are u vested in stocks bonds and cash?

90% stocks. 5% mutual funds and ETFs, 5% cash.

I have no clue about bonds so I don't touch those.

 

[IronMac]

Market sentiment is the strongest indicator of all

There's so many ways to identify if a market will crash, just study penny stocks, its creating asset bubbles everyday.

So u tell me how to be unable to time the markets?

The study of the markets is the study of human nature, when u understand this, together with fundamental and technicals it will be easy to trade the markets easily

Really? You claim to be able to understand human nature? Coupled with understanding the fundamentals of globalized economies with technical indicators that may be false (ie. China) or revised three months after they have been released (USA)?

Ooooookay...