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How did they come up with this 60% threadhold? why not 50%, 40%, 30%?
They are in fact deciding who get to win money and who get to loose money, and how much money after the fact....in a big gamble.
problem with thinking you will get out or in once you see the trend is you just dont know if things are a trend or a blip until after its over.
its kind of like reccessions, you dont know your in one until after the fact.
just look at right now... we had a huge drop this past week and the question is if you were trying to time things do you just wait and see and risk going lower, or do you bail and loose your money and hope your right that we are headed lower?
of course the hardest part is after you bail at what point do you get back in..
thats why most people who had these ideas of pulling out and not going down with the ship again never do it.
I think there is very good reason to be sceptical about attempts to "time" the market. It is unlikely you will be successful if you try to predict the peaks and valleys. That means it is unlikely you will be successful if you try to "bail" at the top and buy at the bottom. The winning strategy seems to be to buy as the market CONSISTENTLY goes down and to sell as the market CONSISTENTLY improves. Both of these are contrary to human nature. Instead we see most novice investors doing the opposite and actually making less money - and sometimes losing big time.
Acting unwisely and then blaming the market may make you feel better but it doesn't help your investments.
forget bailing at the top or buying at the bottom. most of us would be happy if we could forget about the 10% at the top and bottoms and just keep the 80% in the middle.
try as hard as we could im sure most of us have tried it at one point or another in our lives and may have guessed right getting out at least once but getting yourself to go back in when its your money on the line is another thing.
i think if i could follow the trends and call them correctly 2x in a row id be a billionaire by now.
i think if i could follow the trends and call them correctly 2x in a row id be a billionaire by now.
How about 58 times in a row? Or more accurately, 116 times in a row?
You've heard the old adage to "sell in May and go away." Well, someone has analyzed the results of following that philosophy from 1950-2008 and found that the stock market rose an average of 7.3% from November-April each year and was barely positive at .1% from May-October.
(And no, I am not seriously advocating this approach, just thought it was an interesting article in light of the current discussion in this thread on market timing.)
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Guess I didn't get the message that the sky was falling!
