Market Timing

Discussion in 'Share Investing Strategies, Theories & Education' started by dunno, 1st Oct, 2018.

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  1. dunno

    dunno Well-Known Member

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  2. Ouga

    Ouga Well-Known Member

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    "Trying is the first step towards failure" Homer
    Interering!
    I try and traded a little (that’s the whole point!) and failed to beat the market although I was in the green for a while before I decided to trade again.

    An interesting perspective and test for those who think they can outsmart the market as a whole
     
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  3. The Falcon

    The Falcon Well-Known Member

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  4. Nodrog

    Nodrog Well-Known Member

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    He gets criticised for always making investing seem hard but many miss the point. When greed and fear are involved it is bloody hard. Surprisingly the other important ingredient of simplicity seems to be contrary to human nature.
     
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  5. Zenith Chaos

    Zenith Chaos Well-Known Member

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  6. Snowball

    Snowball Well-Known Member

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    Haha after a couple minutes I thought “this is stupid, how the hell do I know what’s going to happen?”

    Hopefully that’s a good sign that I’ll stay the course!
     
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  7. sharon

    sharon Well-Known Member

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    Oh dear - I didn't do well at all. Fear is my biggest motivator.
     
  8. Nodrog

    Nodrog Well-Known Member

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    I had no trouble winning, I chose not to play:).
     
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  9. sharon

    sharon Well-Known Member

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    Yep - the smartest thing for sure.
     
  10. SatayKing

    SatayKing Well-Known Member

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    It is still all about ME!
    That's been my issue for years. As a consequence, everyone else is way, way behind.
     
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  11. SatayKing

    SatayKing Well-Known Member

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    It is still all about ME!
    I don't know if it's a good or bad aspect of today but with access to the internet and trading platforms it doesn't take much in order to sell in panic times - unless the internet crashes.

    Pity the poor buggers in 1980's era. I recall in 1987 the number of people I heard moaning, almost to the point of weeping, they couldn't contact their broker and were unable to sell as the phone lines were overloaded. I don't think that "good" fortune (sorry for the pun) stopped them selling a bit later on. The batteries on their transistor radios almost went flat listening for fiance news.

    Edit: For "fiance" read "finance" and all shall become clear. Then again I knew nothing about their personal lives nor did I want to.
     
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  12. dunno

    dunno Well-Known Member

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  13. Willy

    Willy Well-Known Member

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    This market timing game is called three strikes and you're out.
    Here's how to play-
    When you hear about how good the sharemarket is going in the news, start checking your balance.
    If you cant believe how much it's gone up- strike 1.
    If you check it again and are even more surprised-strike 2
    If it happens again- strike 3 you're out. Start taking money off the table.

    So far I completely avoided the GFC by selling everything and got 30% sold before the covid crash.

    Now I just need to learn to use it in reverse to time my re-entry. Just not sure if strike 3 is time to re-enter or time for a fresh pair of undies!

    Willy
     
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  14. Ross36

    Ross36 Well-Known Member

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    I spent WAY too much time looking at moving average trends to time selling and buying. Since 1930 it is a far superior long term method than buy and hold IF:

    1. You do the allocation on the first day of the month. This is a weird anomaly - and no doubt random. If you use another time to reallocate it tends to fall apart.
    2. You use the US share market as the indicator. If you use the ASX on ASX data it performed horribly since the 1930s.
    3. You don't have to pay tax on sales. As soon as taxes get involved the whipsawing of buying and selling destroys any benefits.

    In the end I couldn't justify it or any other timing strategy. Seems like too much of a random chance it has performed well. People are crowing about it now because of the (lucky?) coinciding of the trend crossing with the start of March. However we have no idea if it will actually work until years in the future. Just because you sold at a good time doesn't mean you will buy at a good one.
     
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  15. Nodrog

    Nodrog Well-Known Member

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    And it’s bloody stressful especially when one gets multiple whipsaws in a row. Thank Christ I gave all that up and switched to long term buy and hold investing which has resulted in a wonderful retirement.
     
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  16. Omnidragon

    Omnidragon Well-Known Member

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    Consistently outperforming the market is hard.

    If you look at then ASX 200, if you had bought an index fund or just held a basket of top 50 companies and entered any time in the last 6.5 years (except for during the Chinese currency crisis in Nov 2015-Jan 2016), you’d be underwater now. And if you held from pre GFC til now, you’re still underwater lol. Of course that’s not a fair comparison as it ignores dividends, so the accumulation index is a fairer comparison.

    That’s why the first thing I sent out in my quarterly this quarter is that we are actually still profitable after 2 years and after this crash.