So let me make my opinion on this clear now: I do not recommend this strategy or any other
form of market timing.
To understand why, lets recap the basic theory of the sort
of market timing in which I believe.
He emphasizes the importance of asset allocation and diversification and the limited
effects of market timing and security selection.
One of the key factors that determines the status
of our market timing system is the performance of leading growth stocks, which usually lead the broad market in either direction.
It is not a prejudice against cash so much that it is a prejudice against any
kind of market timing whatsoever.
Maybe some
sort of market timing using index funds or ETFs might be better so that you can avoid the majority of bear market pain on leveraged money.
Your initial pricing should be focused on what would trigger the most amount of traction in the least
amount of market time simply on price alone.
I think where DM and I are on different pages is the fact that we are discussing ultimately the
merits of market timing.
Some of the decisions you make with the
help of market timing will bring you profits, and others will cost you money.
The difference between one commission level and another will likely never cost as much as one
month of market time in many jurisdictions.
Which means you really want to mix the discipline of asset allocation with the speculative
behavior of market timing, or trying to predict the market's movements.
Investing a regular amount each month allows you to ride out price fluctuations, unlike a lump - sum investment which is at the
mercy of market timing.
Since you're thus using daily news events to tell you how much to invest in each asset class, this is the classic
definition of market timing.
The late stages of a bull market, which presumably we are in right now, is when the
appeal of market timing is the greatest.
The
process of market timing can be time consuming, and requires an understanding of the market, and needs research and detailed analysis.
Instead of market timing based on valuation many let their emotions cause them to make detrimental asset allocation decisions.
Sellers should price their homes realistically and correctly according to value from the
start of marketing time and then expect positive results.
Yes, traditional publishing involves putting in a
lot of marketing time, too, but you'll usually have some guidance and help.
As a buyers agent I advise my clients to come in much lower on properties that have over 30
days of market time than ones newly listed.
I've never been a
fan of market timing or thinking I could «beat» the market buy jumping in and out of stocks.
Some of the decisions you make with the
help of market timing will bring you profits, but far more of them will cost you money.
The
practice of market timing consists of coming up with and acting on a series of guesses (or estimates, or assessments of the probabilities).