feedburner
Enter your email address:

Delivered by FeedBurner

Market Timing or Not?

Labels:

Read an interesting article on “The Market Timing Myth” by Brett Arends of WSJ.

Basically, he says that investors have been persuaded and conned by the investment industry to stay invested no matter what. Because you cannot time the market and if you miss the big days when it rises, you will lose a huge percentage of the gains.

The reason is that the industry doesn’t tell you that if you miss the 10 biggest loss days, it makes it even better for your stock portfolio.

The caveat is that it doesn’t give you, the investor, reason to start day trading and try to time it day to day.

His weapon or way to try to time it is to use the Shlller PE which takes into account cyclically-adjusted prices with earnings ratio. The inflexion points of the peak is your sell signal. Reason being that earnings are artificially inflated.

And while it is not stated when you should come back, I guess looking at the graph there that you should try to get back into stocks when it is below 15.

I wonder what he thinks we should all do now? Buy or dump? What do you think?

 

Source:

1. The Market Timing Myth- Brett Arends. Wall Street Journal

Related Posts




Bookmark and Share


0 comments:

Post a Comment

Disclaimer

The information contained in this blog is prepared from data believed to be correct and reliable at the time of publication of this report. The authors do not make any guarantee or representation as to the adequacy, accuracy, completeness, reliability of the information contained herein. Neither the authors or any affiliates or related persons shall be liable for any consequences (direct or indirect losses, loss of profits and damages) of any
reliance placed on information provided in the blog.

Shares and financial instruments illustrated in this blog can go down sharply or in certain instruments suffer total loss on the initial investments. Investors are advised to make their own judgment on the information provided and consult their own financial advisors or consultants as to the suitability of the products illustrated to their particular financial needs and objectives before acting on any information contained herein in this blog.