Valuation-Informed Indexing #500: Market Timers React Differently to Every Aspect of the Stock Investing Experience

I’ve posted Entry #500 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Market Timers React Differently to Every Aspect of the Stock Investing Experience.

Juicy Excerpt: Market timers also react differently to price changes. Buy-and-Holders believe that it is economic developments that cause price changes. So they naturally see it as a positive when prices rise. If price increases signal economic growth, we all should applaud them. But market timers believe that price increases that take the CAPE value above its fair-market level of 16 signal nothing more than irrational exuberance on the part of investors. That’s a negative sign. It tells us that the market is becoming more emotional and less rational. Market timers do not applaud price increases that take stock prices above fair-value levels.