Timing the market

[Bibi]

30 % of cash in the market & 70 % of cash in the bank, and when the market crashes U lost 50% of portfolio is actually U lost 15 % of cash only.

It seems logical but then???

If U read my post closely, then the 70 % of cash would buy from 2008 to 2009 March(bottom).

Then stop buying and hold. Chicken out already.

From 2009 to 2010 or even 2011, the portfolio lost to the tune of ?% in the worst case.

So 30 % of cash already in the market before the market crashes, and then 70 % of cash buying in the Bear Market, will this portfolio loses more then 50 % or less?

Are you trying to maximise your gains? If not the chances are, once u go all in during market crashes, despite losing > 50%, once the market recovers, you will not only recoup your losses, your portfolio will also gain 100% or more.

[Behappyalways]

One thing we need to learn is that stock market has cycle. I doubt anyone can actually catch the top or the bottom of this stock market cycle.

But with the so called risk free US treasury bonds inching up, I guess the stock market down cycle is probably not too far off.

https://www.cnbc.com/2018/01/18/the-bond...yptr=yahoo

[funman168]

One thing we need to learn is that stock market has cycle. I doubt anyone can actually catch the top or the bottom of this stock market cycle.

But with the so called risk free US treasury bonds inching up, I guess the stock market down cycle is probably not too far off.

https://www.cnbc.com/2018/01/18/the-bond...yptr=yahoo

[chialc88]

I love timing the market but time in the market works better.

When ST Engineering is selling at $1.50, DBS selling at $4, Singtel selling bellow $2,
how much are you going to buy?

At that price point, you might think that it's a no brainier.

Those who brought, raise up your hand, please.

Even if you could time the market correctly,
what makes you think that you could profit from your *prediction*?

If you look at FY17, a lot of people were selling their stocks pre-maturely,
when it's still charging up.
"reversion to mean" they justified and then followed by regrets...

Don't need to regret, just learn from the experience and find another better business (such as 5dd, s85, s19?)

I love timing the market as it has an element of excitement that our prediction is correct.
Question is whether I had the temperament to pick them up cheaply?

Been there, done that and this time will be different! (I tell myself).

---

Time in the market is very easy.
Just keep vested thru thick and thin.
Nobody says that you need to be 100% vested if your are practising time in the market.
Your allocation definitely can varies due to your own circumstances.

QED.

In order not to look stupid when we can *clearly* predict that the market is falling,
sometime, it's good to shift our holdings into something called defensive stocks.
So that the hit is not as sharp (drop).

This to me is do-able but sub-standard.

A better method is to allocate $$$ into growth (ok, since this is value investment forum, I shall tone down and says)
under-value stocks.

This method works in all conditions.
Sunshine, under-value stocks perform well.
Raining season, under-value stocks is not too shabby. It should take off when the sun comes out again.

Investment should be easy but not easier.

[holymage]

Personally, I agree with Jeremy Grantham that the stock market is currently in a melt-up. A lot of retail investors are dismissing the business cycle. Currently, institutional investors are the most leveraged and there are more bull than bear calls. Most markets that I am observing are overvalued and will probably get more expensive in the short-term. I read that 60-70% of the gains in recent years is actually due to multiple expansion.

I reckon that the Fed rate hike will be the catalyst that slows the economy and prick the bubble. US companies are the most leveraged in recent times. I have the same feeling as specuvestor that anytime between end 2018-2019 will have a correction, given the current euphoria. The S&P500 achieved continuous record monthly gains at record valuations in 2017, with only a 0.04% dip in Mar.

Low interest rates are making investors feel that There Is No Alternative. But is that true? Short-term bonds are an option while waiting for the correction in overvalued assets. If assets are expensive, just wait for the right price to beckon. I don't think that is market timing. That is patient and discipline. Personally, I am selling my overvalued positions, but will still buy if there are undervalued assets.

[Life is a game]

Haha Bro Blue. How many percent cash now? I'm 70 into cash already.

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[Life is a game]

You can go both ways right Bro Temperament? 70 percent in cash can use a bit to short. Cash in hand during crisis is always better than fully vested. No doubt on this point I guess. With cash in hand u can slowly analyse and pick companies with strong moat also.

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[Life is a game]

Mr. Chia. Time in the market is better for you now because you have a superior margin of safety. 4 bagger in MM. If you are just vested into MM at this price then I would imagine timing the market works better. Just my 2 cents opinion.

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[yeokiwi]

Time in the market is better for you now because you have a superior margin of safety

Historical margin of safety is rather meaningless. Same as dividend yield and PE ratio based on purchase price.

Normally, the victors will get to have the final say.
For the last few years, the "stay in market" investors have the upper hand and market timers are disappointed.
If the markets crash the next day, the 'stay in market" investors will feel like a fool for not letting go of the
supposedly "undervalued" stocks.

In 2009, my portfolio(90% of my liquid assets??) dropped by half. It might be a bit distracting but life still went on.
Of course, if I had "market timing", I will be much richer today. But, I might have sold everything away in 2011 due to market timing.

Since I am just looking for around 10% annual return hopefully, "stay in market" with Ben. Graham class of stocks is much more viable. Less distracting to your personal life too.

Macro view,
There are so much liquidity in this world that I am not very sure whether it is worth to hold on to cash. Apparently, the way to solve any financial crisis due to financial reasons(exclude wars, natural catastrophes..) is to print more $$$ and the central banks are fast in printing.
At the same times, the rate of economic value generation this day is exponential.
Uber valuation reaches $3.5billion in just two years. 
[Image: bii-sai-cotd-fb-uber-early-1.png]

[opmi]

I dont see any credit crisis looming in the next 2 years. So not too worried.

IMO, bitcoin bubble is NOT the canary in the mine...yet...

"cash is trash" phase will continue...more in HK than in SG.

also stock indices breaking new highs are not bubble signs on its own.

must see human behaviour.....ownself and others...

last time, can still use undergrads looking at Teletext in uni libs...haha
now, dont know, everyone looks at brokers app as indicator??