3 ms·
Do you have any evidence that your suggestion actually works for real people? All studies on this I've come across say that anyone using common wisdom will both
by kqr 5y ago
Do you have any evidence that your suggestion actually works for real people? All studies on this I've come across say that anyone using common wisdom will both exit and re-enter too late -- i.e. they tend to end up selling low and buying high, and even just holding would be an improvement.
(I'm saying "even just holding" because a constant-fraction rebalanced portfolio is a disciplined way of actually buying low and selling high, and not only in a bear market.
- mikevm 5y agoThe ERN blog had a few nice posts regarding market timing: https://earlyretirementnow.com/2018/02/21/market-timing-and-risk-management-part-1-macroeconomics/ https://earlyretirementnow.com/2018/02/21/market-timing-and-... https://earlyretirementnow.com/2018/04/25/market-timing-and-risk-management-part-2-momentum/ https://earlyretirementnow.com/2018/04/25/market-timing-and-... In the second one he simulates a momentum strategy which does pretty well, which can be used along with multiple other signals to increase confidence. I was thinking of simulating using leverage after these kind of drops to try to increase returns even further.