3 ms·

Time in the market beats timing the market, bears have predicted (large number) out of the last (smaller number) recessions, etc. None of this is novel. "Predic

by zahlman 5mo ago

Time in the market beats timing the market, bears have predicted (large number) out of the last (smaller number) recessions, etc. None of this is novel. "Predicting" a stock crash due to political reasons is effectively just a fancy restatement of anti-those-politics views; and it isn't substantive, especially when the prediction comes with a years-long window.

cosmicgadget 5mo ago
You need to caveat this with "... if you want to be lazy and ignorant of your port." Otherwise there is so, so much evidence that it is flat wrong.
- ergocoder 5mo ago
  Yeah, meanwhile all the wealthy people actively manage their port with an insane amount of efforts. They would compensate hedge fund manager with insane amount of money. Then, they turn around and tell average people to forget about the investment. Just park your money in the index fund over the long run. I mean, if you are either stupid or don't have time, then yeah please only do index fund.
  - cosmicgadget 5mo ago
    "But my 401k advisor showed me a chart!"
  - zahlman 5mo ago
    It took me quite a while to figure out that the two of you are using "port" as short for "portfolio". Never heard that before. "The wealthy people" got wealthy in a whole bunch of different ways that are not investment; and having gained wealth, they invest it for many different reasons aside from maximizing log-mean expectation (or probability of sustaining a given level of cash flow, or other objective metrics that only consider the investment itself). Hiring a well-compensated "hedge" fund manager (many of these funds are not at all about hedging) is barely any more "effort" than buying and holding SPY, as the work is being entirely delegated. Many strategies are dependent on that level of wealth (or designed to address problems that only apply to that level of wealth) for tax-related reasons. There is plenty of evidence that most lay people who try to time the market lose out on average, and I see no reason to expect you to be an exception. Active trading loses out on average to indexes by mathematical necessity, as both grow on average proportional to the total value of equities, but active traders (and holders of actively managed funds) are exposed to higher fees. The only winners there are the market makers.
    - cosmicgadget 5mo ago
      Isn't this exactly what I said? The "time in the market..." mantra only applies to people who are ignorant or lazy? Does your "closed system" assertion account for selling options?
    - ergocoder 5mo ago
      > is barely any more "effort" than buying and holding SPY, as the work is being entirely delegated Effort is translated to money e.g. you do it yourself or you hire someone to do it; someone is spending that large amount of effort that is valued at millions of dollars/year. If SPY is so great, then wealthy people would've just bought SPY. But that's not what they are doing. They pay fund managers top money (think top 0.1% earner) to invest for them. > Many strategies are dependent on that level of wealth (or designed to address problems that only apply to that level of wealth) for tax-related reasons. Their main goal is to grow the funds. Tax-saving is secondary at best. Nobody would be okay with shrinking the fund to acquire tax-saving lol.
- zahlman 5mo ago
  > Otherwise there is so, so much evidence that it is flat wrong. Pardon; are you asserting there is mountains of evidence that the bears have not, in fact, claimed impending recession far more often than actual recession occurred? Or that market timers are generally successful (are you not familiar with e.g. https://longbets.org/362/ https://longbets.org/362/ )?
  - cosmicgadget 5mo ago
    Are bearish positions the only way to time the market?

by zahlman 5mo ago

cosmicgadget 5mo ago

You need to caveat this with "... if you want to be lazy and ignorant of your port." Otherwise there is so, so much evidence that it is flat wrong.

ergocoder 5mo ago
Yeah, meanwhile all the wealthy people actively manage their port with an insane amount of efforts. They would compensate hedge fund manager with insane amount of money. Then, they turn around and tell average people to forget about the investment. Just park your money in the index fund over the long run. I mean, if you are either stupid or don't have time, then yeah please only do index fund.
- cosmicgadget 5mo ago
  "But my 401k advisor showed me a chart!"
- zahlman 5mo ago
  It took me quite a while to figure out that the two of you are using "port" as short for "portfolio". Never heard that before. "The wealthy people" got wealthy in a whole bunch of different ways that are not investment; and having gained wealth, they invest it for many different reasons aside from maximizing log-mean expectation (or probability of sustaining a given level of cash flow, or other objective metrics that only consider the investment itself). Hiring a well-compensated "hedge" fund manager (many of these funds are not at all about hedging) is barely any more "effort" than buying and holding SPY, as the work is being entirely delegated. Many strategies are dependent on that level of wealth (or designed to address problems that only apply to that level of wealth) for tax-related reasons. There is plenty of evidence that most lay people who try to time the market lose out on average, and I see no reason to expect you to be an exception. Active trading loses out on average to indexes by mathematical necessity, as both grow on average proportional to the total value of equities, but active traders (and holders of actively managed funds) are exposed to higher fees. The only winners there are the market makers.
  - cosmicgadget 5mo ago
    Isn't this exactly what I said? The "time in the market..." mantra only applies to people who are ignorant or lazy? Does your "closed system" assertion account for selling options?
  - ergocoder 5mo ago
    > is barely any more "effort" than buying and holding SPY, as the work is being entirely delegated Effort is translated to money e.g. you do it yourself or you hire someone to do it; someone is spending that large amount of effort that is valued at millions of dollars/year. If SPY is so great, then wealthy people would've just bought SPY. But that's not what they are doing. They pay fund managers top money (think top 0.1% earner) to invest for them. > Many strategies are dependent on that level of wealth (or designed to address problems that only apply to that level of wealth) for tax-related reasons. Their main goal is to grow the funds. Tax-saving is secondary at best. Nobody would be okay with shrinking the fund to acquire tax-saving lol.
zahlman 5mo ago
> Otherwise there is so, so much evidence that it is flat wrong. Pardon; are you asserting there is mountains of evidence that the bears have not, in fact, claimed impending recession far more often than actual recession occurred? Or that market timers are generally successful (are you not familiar with e.g. https://longbets.org/362/ https://longbets.org/362/ )?
- cosmicgadget 5mo ago
  Are bearish positions the only way to time the market?