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Time in the markets beats timing the market if you actually have capital to throw around to gleam a decent 5% yearly return. If you don't have much capital, you
by kjkjadksj 2y ago
Time in the markets beats timing the market if you actually have capital to throw around to gleam a decent 5% yearly return. If you don't have much capital, you have to time the market like hell to build up your capital to a level where 5% yoy actually is a decent amount of money.
- deleted 2y ago[deleted]
- huijzer 2y ago5% is decent? The index made about 10% on average, Peter Lynch about 30%, and Buffett in the ‘60s was at 40-50%.
- 01HNNWZ0MV43FF 2y agoIf timing the market works at a small scale, why stop? If it worked, wouldn't everyone do it?
- wongarsu 2y agoYour risk tolerance changes. If you are living on $4000/month and have $500 to invest, you may as well bet those $500 on black. If you have a sizable investment that you hope will pay for your retirement you might want to go for the solid 10% yoy. Similarly if you manage other people's money they might be unhappy with you making 50/50 bets with that money. It's the same logic that causes people to buy lottery tickets. Winning big in the lottery is unlikely, but getting rich by saving two lottery tickets worth of money each month is impossible. The risky strategy with the worse expected outcome is the only one that leads to your goal.
- 01HNNWZ0MV43FF 2y agoTime scale yeah. I may do a bond tent when I get closer to retiring. But given the same amount of time and different amounts of money, if my cost of living is covered either way, why use a different strategy?
- kjkjadksj 2y agoIt does work at small scale and people don't stop, make careers and billions out of it, see high frequency trading. You can play market timer yourself just by using some game theory and keeping up with the chart.
- 01HNNWZ0MV43FF 2y agoI don't feel like competing with hft though lol