Monday, July 3, 2017

Market Timing no Good

We have on this blog, on and off, discussed market timing. In fact we tend a little bit towards building cash when approaching market peaks to be ready for buying opportunities in the following down turn. Some months ago, I did a spreadsheet simulation showing that apart from unreal perfect market timing, building low and high cash positions did not add much to your portfolio performance and that panic selling during the downturn is the worst thing an investor can do.

Here is a link to an Globe and Mail article on market timing that confirms the above. In fact it claims that being always fully invested in the bond and stock market with a 40%-60% distribution gives you the best performance. Have a look.

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