FYI: Imagine: You, the individual investor, have an uncanny skill at timing markets and picking the lows. Your prescience allows you to buy near the bottom of every major crash. Anytime the market has a substantial drop, you manage to make a purchase of broad indexes at advantageous prices. Similar to the World’s Greatest Trader, you set up an online account, and then you are off to the races, timing markets with the best of them.
How would you imagine a trader with these skills would do?
Regards,
Ted
http://www.ritholtz.com/blog/2014/08/worlds-greatest-market-timer/print/
Comments
I read this pretty quickly, but I believe the World's Greatest Market Timer just entered the market at the low point of each year to make his purchases.
But he didn't do what would provide the biggest bang for the buck, which is to exit the market with his accumulated nest egg to sidestep the bear.
Then re-enter the market after the drawdown was over.
That's what we expect from "The World's Greatest Market Timer"
Timing the annual purchases seems to be a small part of what market timers are trying to do.
The market timer has two main objectives:
1. Get out of the market and sidestep the bear.
2. Get back in the market to fully participate in the next bull
I have no market timing skills, and have never tried it.
But I'm not sure this article addresses the subject properly.
How would one have done if they had bought and sold gold at its highs and lows?
How would one have done if they had bought and sold oil at its highs and lows?
How many brain cells would I have said if I had not clicked on that link?
And most importantly, WTF do I bother?
Well, it appears that the article was a success... for you, it reaffirmed
the putative Wall Street advice.
Personally, I like rjb112's response.