ToddyHill said:

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If you pulled all your chips off the table February 2020, you looked like a genius. But if you weren't back in by May, you actually lost.

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I am not a genius, but I went all cash in two IRA's and three brokerage accounts in late January 2020. I got back in the market beginning in late April 2020.

The backstory...in late January 2020 I was listening to NPR on my drive to work. I never listen to NPR, but for some reason I had it on that day. They were interviewing a virologist from Hong Kong...who felt Covid would become a worldwide pandemic. What intrigued me is that at that time there were many protests in Hong Kong against the Hong Kong government, who were backing an Extradition Bill, that would have sent the protestors to China. The virologist stated the Chinese could not be trusted and any information they passed on was contrary to the facts. If it had been a virologist from anywhere else I would not have given it a shred of consideration.

Call it Divine guidance, but I sold everything over the next two days.

All this said, I do agree one cannot time the market. In my case, it was if I had won the lottery.

But I'll never do that again.

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Credit where credit is due. But yea that was a once in a lifetime type deal. The drop happened in a matter of days (30% in a week) vs weeks or months. Stimulus pumped in artificially bumped everything back up immediately.

You are viewing that correctly. It was the Powerball and you pulled the winning ticket.

I would say the key isn't knowing when to go cash.

I would say the key is being liquid enough to take advantage of lows.

EG: $1 million in the market and covid hits, you don't pull the $1 million into cash. You leave it but if the market bottoms out you have another $250k you are ready to put in the game.

But then most of these guys will be like "that's dumb, you should have had that other 250k in the market instead of it getting crushed by inflation!!!"

The media was swamped with supposedly experts stating "we are going to have a recession" messaging. I watch macro data due to my mortgage job. They don't tell the future, nothing does, but you can see trends. Jobs, inflation, GDP etc.

I never saw data supporting all the recession mania. Never. It didn't make sense to me. All the data has been extremely strong. And now inflation has cooled the market responded especially today.

To be fair, I don't think it was a stretch to think that shutting down the US for a long period of time was going to result in a not so pretty financial market for a long period of time.

But like anything, what the market should do and what the market will do are two different things because there's all kinds of prop-ups, manipulation, etc... that go on behind the scenes. So what you get often times is your "who knows what it's going to do?".

Didn't a large part of what happened with Bussey and the housing market involve the underlying mortgages being known/revealed to be dog**** but the CDOs were still propped up by Wall Street for months?

Tough to predict a market when much of it depends on who pulls the strings behind the scenes no matter the data.

Tex117 said:

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Charismatic Megafauna said:

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Ok how about this: 90% of the markets gains in a given year are made in just 8 days, or something like that, right? So what's wrong with going flat once in a while when your spidey sense starts tingling? Seems like not much chance of missing a run while providing a lot of peace of mind

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Because clearly your "sense" will have you miss out on one of those 8 days.

Maybe you just get lucky. But thats gambling. Not investing.

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Ding ding ding.

permabull said:

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Bear #2 is a retired 70 year old with a $3 million portfolio but doesn't even touch it because he mostly lives off his pension. He has a guy who manages his money for him for 1% AUM and has a bunch of letters after his name but none of them are CFP, CPA or CFA. I looked a few up and its mostly insurance sales stuff. His guy convinced him to go 100% cash in December last year because of the "obvious" recession. Bear #2 will be fine because he doesn't even spend his money and he is happy as a clam because his broker has convinced him that he did well earning interest in the money market. I would guess bear#2 missed out on at least $400k trying to time the market rather than just keeping a balanced portfolio and paid a guy $30k last year for the privilege.

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Tell this 70 year old to fire his "guy" and put all his money into an index fund. At his age maybe SPY will be good.

https://finance.yahoo.com/quote/SPY/

He should always be in the market at all times. Indexing is a good way to maximizing gain while minimizing risk.

If he wants less risk than 5.5% CDs are available for 10 years. He can do that and get income and no risk.

My belief is that you need to be in the market with about 90% of your non-real estate investments most all the time. Try to buy near the bottom and stocks in growth industries that appear to be the 800 lb gorilla in the room .

For example, I bought 20 shares of Tesla a few months before the first split for about $12,000. After the two splits, I now have 300 shares with a value of about $70,000. Not too bad of growth in three years.

I bought Generac in about the same time in 2020 for around $80 and then sold it in 2021 for $400. Bought some back in Oct for $85.

Both companies are 800 pound gorillas.

There will be some great profits made in stocks the AI sector once it all shakes out over the next decade.

Also, will oil/gas down, there are beginning to be some great opportunities in that sector. I have a few pipeline stocks that have done well with dividends from 4% to 7%.

Patience and study is the key....and a lot of luck.

I feel sorry for those who measure "gain" in nominal instead of real returns

The SPX priced in Gold hasn't been anything special for a couple of years