Buy and Hold vs Market Timing

[MonarchDon]

I am currently out of all of my positions in the stock market and am sitting in money market. I have been waiting for this market (spy, qqqq) to break out and it looks like it is getting ready to break to the upside. With that being said I am looking for opinions on buy and hold vs. timing the market. I am a follower of a website www.investors-club.com and the charts are saying it's time to buy but when the charts say it's time to sell then you must follow the rules and sell. Questions, Comments.

[Sniper]

If you are looking for help in timing the market, you should:

1. Subscribe to Investors Business Daily
2. Purchase Hirsch's Stock Traders Almanac (annually)

[MonarchDon]

I hear the claims about outperforming buy&hold with using market timing. But when I hear about an average return of let's say 7% over 10 years I think that is pretty good and why should I mess around with going in and out of the market ?

[Sniper]

[ QUOTE ]
I hear the claims about outperforming buy&hold with using market timing. But when I hear about an average return of let's say 7% over 10 years I think that is pretty good and why should I mess around with going in and out of the market ?

[/ QUOTE ]

Stock traders Almanac will show you very simple timing models that clearly outperform.

[Dan Mezick]

I think you have to do your own work with regard to all trading decisions. The main reason is that you must have the strength of your own convictions and beliefs to act on them in a way that will produce profits.

Once you take a position, you become a member of a crowd, which is driven by primitive emotions.

This tests your beliefs as you are potentially swept along by the crowd's waves of strong emotion.

[Peter666]

If you are satisfied with 7% average interest over 10 years, there is absolutely no reason to market time, and plenty of disadvantages, such as trading fees. Rather stick it in a good value invested mutual fund. I think this works safely up to about a 12% yield.

If you want to make more than 12% interest, than studying and playing with individual stocks is the way to go. Here is a recommendation: time it to put your money into Berkshire Hathaway when Warren Buffet dies, so you get the stock at a low price. And then forget about it until you want to spend it.

[midas]

My suggestions are as follows:

1. Buy (through dollar cost averaging) and hold broad indexes like SPY and MDY.

2. Market-time select niche industry groups where going deep in research may give you significant advantage - ie shipping stocks.

Good Luck

[GeorgeF]

1) Market timing means your are trying to outsmart people who are trying to outsmart you. Why do you think you are smarter than me, Warren Buffett, 2+2 posters, ect for instance.

2) Buy and Hold has an advantage that the little guy who has a steady income can sustain more pain and outlast a pro who has 10:1 leverage and clients that will bolt at any downturn.

3) Not a great example but compare slots vs poker. If you can outsmart other people choose poker, else you will lose alot less with slots. If you can outsmart people chose maret timing otherwise go with buy and hold.

4) Save time and money: bobbrinker.com fundx.com

[Sniper]

[ QUOTE ]
1) Market timing means your are trying to outsmart people who are trying to outsmart you. Why do you think you are smarter than me, Warren Buffett, 2+2 posters, ect for instance.

[/ QUOTE ]

Market timing is not about outsmarting anyone... the stock market is NOT a zero sum game, where for every winner there has to be a loser.

Market timing is about putting the odds in your favor!

[lastsamurai]

[ QUOTE ]
If you are looking for help in timing the market, you should:

1. Subscribe to Investors Business Daily
2. Purchase Hirsch's Stock Traders Almanac (annually)


[/ QUOTE ]
When you subscribe to IBD make sure you sign up online www.investors.com I think this is the only tool you need. Read the "Big Picture" section and follow the NEW AMERICA section. The Big picture is very informative stuff.