I am not saying I do not time the market, get out when the 200 Ma is broken and Performance lots of my Systems improve as well (though not all,
some agressive 5 Stock modells do actually not care based on Performance (though mdd gets better with Timing).
Get out when the earnings are trending down and they improve even more.
My Point is: what if your Timing is wrong? Are you prepared for a 50% Drop?, if not, your are in Trouble, because if you can not
get trough it and give up at the wrong Moment, lets say 30% drop of you port and get into cash and see how your Modell snaps
back in no time, THAT will break your Performance much more, maybe even your ability to invest ever again (I got a lot of friends who got burn
2008 and they still wait for the next drop to get into the market again, they missed a multy year bull market!!!) And that is why most Investors “do not make it”.
And I got friends who get nervous, when the market Drops 10%, sorry, but that is plain nuts. If you can not controll your emotions, then
your need to work on them.
We are in a ring with a Gorilla, he will swing hard and we will knock you down one day. To believe to be able to controll all 100% of those swings
gets you in Trouble (as well as leverage) Be prepared for a 50% drop and follow your Modell even then trough.
All great Investors have their emotions in check. To have your emotions under controll is 100% of the game, it is a kick out
criteria (e.g. criteria not fulfilled = no sucess). You can have an average Modell + emotions controll = Success.
Best Modell in the wold + emotions not in check = no sucess!
That is the reason why everybody is in search of modells with 45 dregree angle going up with no dds, they
search a Modell where they do not need to have their emotions in check.
Well that road leads to deasaster.
I mean look at the modells of he great Investors. The free modells of p123 are mostly better then theirs.
They could not care less, because they just be able to make 10-20% year after year and ride out the bumps in between.
Think about it: why does buffet not time the market? Why could he not care less? In his case, he only cares
about the value of his stocks and he knows, that Long term the value will determine Price, he simply waits
until the market is “rationale” again. And so far that has worked since 1870.
I think it is okay to time the market, get out if the 200 ma on the markets are broken,
get out if the sp500 does not make a new high for more then 12 Months etc.
Fine! But be prepared when you are wrong, for that Moment you need to be prepared.
Work on your emotions!
Regards
Andreas