Tom, i frequently drop by to read your day-to-day column and see you sitting in the G fund through this bull market. To be wrong about the market is always understandable, but what i'm not getting is your apparent narrow logic that you use to analize the market.
You practically exclusively rely on the AAII Investor Sentiment Survey, using more Bears as a good thing, with basically the theory that the market is exactly the opposite shape of what general perception is. In other words, you're a classic contrarian, but you're only analyzing it with this one viewpoint.
Ok, i'll be the first to confess there was a time I want to believed so badly another easy skeme for beating the market which was presented by Charles Givens; his "Money Movement Strategy" which uses simply the current interest and the direction of the interest rate to decide on whether you should be in stocks, bonds, or cash. In theory, his logic is actually pretty sound. And like any good scheme, it works wonders when back tested with the past market. And his technique is so simple (roughly as simple as yours), i wanted to believe really bad that I had found the holy grail to market timing and that I was going to make a 15-20% return guaranteed from then on like he promised. But then there's reality!
Tom, you are clearly a smart guy as evidenced simply by your writing ability, but I think you need to accept that the market simply cannot be understood that easily. Would you not admit that all throughout the mid and late 90s that the bulls probably FAR overshawoed the bears for month after month, year after year. And despite that, the market just kept going up for the entirity of the 90s. A DECADE! What if that same thing could be happening now? Oh sure, i'm sure you have some explanation why now might be different, and that explanation would only appear to be right if the 90s didn't repeat itself. Random luck does not equal correct analysis.
Taylor Dent thinks that the market is going to do just that, go through the roof until some crash no earlier than 2008. Are you so sure he's wrong and you're right? Or is it more likely that neither one of you really knows what the heck is going to happen.
In short, i just dont get it. I can deal with you choosing to lose money for yourself, but please rethink doing it on behalf of the other people here too, because many of them are probably following your guidance, and unware that most experts recommend holding a diversified portfolio with rebalancing despite current market conditions.
IMO, the smart investors invest not to lose, per William J. Bernstein, and instead focus most of their energy on keeping more of what they earn. Studies have shown that the primary determing factor to accumulating wealth is focusing on accumulation and savings, not obsessing over that extra 1-2% return, and actually losing 1-2% in that endeavor.
I applaud your initial advise to get the masses out of the G-Fund long term. But I personally feel you're offsetting the good done by that, by advocating market timing.
Azanon
You practically exclusively rely on the AAII Investor Sentiment Survey, using more Bears as a good thing, with basically the theory that the market is exactly the opposite shape of what general perception is. In other words, you're a classic contrarian, but you're only analyzing it with this one viewpoint.
Ok, i'll be the first to confess there was a time I want to believed so badly another easy skeme for beating the market which was presented by Charles Givens; his "Money Movement Strategy" which uses simply the current interest and the direction of the interest rate to decide on whether you should be in stocks, bonds, or cash. In theory, his logic is actually pretty sound. And like any good scheme, it works wonders when back tested with the past market. And his technique is so simple (roughly as simple as yours), i wanted to believe really bad that I had found the holy grail to market timing and that I was going to make a 15-20% return guaranteed from then on like he promised. But then there's reality!
Tom, you are clearly a smart guy as evidenced simply by your writing ability, but I think you need to accept that the market simply cannot be understood that easily. Would you not admit that all throughout the mid and late 90s that the bulls probably FAR overshawoed the bears for month after month, year after year. And despite that, the market just kept going up for the entirity of the 90s. A DECADE! What if that same thing could be happening now? Oh sure, i'm sure you have some explanation why now might be different, and that explanation would only appear to be right if the 90s didn't repeat itself. Random luck does not equal correct analysis.
Taylor Dent thinks that the market is going to do just that, go through the roof until some crash no earlier than 2008. Are you so sure he's wrong and you're right? Or is it more likely that neither one of you really knows what the heck is going to happen.
In short, i just dont get it. I can deal with you choosing to lose money for yourself, but please rethink doing it on behalf of the other people here too, because many of them are probably following your guidance, and unware that most experts recommend holding a diversified portfolio with rebalancing despite current market conditions.
IMO, the smart investors invest not to lose, per William J. Bernstein, and instead focus most of their energy on keeping more of what they earn. Studies have shown that the primary determing factor to accumulating wealth is focusing on accumulation and savings, not obsessing over that extra 1-2% return, and actually losing 1-2% in that endeavor.
I applaud your initial advise to get the masses out of the G-Fund long term. But I personally feel you're offsetting the good done by that, by advocating market timing.
Azanon