Valuation-Informed Indexing #535: The More We Talk About Market Timing, the Better We Will Get At Doing It

I’ve posted Entry #535 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The More We Talk About Market Timing, the Better We Will Get at Doing It.

Juicy Excerpt: I have learned some important things about how market timing works over the past 19 years. I knew from the beginning that it makes sense to lower your stock allocation when prices are nuts. But I didn’t know that doing that is properly referred to as “timing.” And I didn’t know why short-term timing never works and long-term timing always does. I didn’t know how often it is necessary to engage in timing. I didn’t know how much one should lower one’s stock allocation when one determines that timing is appropriate. I knew that some form of timing was required (although I didn’t know enough to call it that in the early days) but I knew next to nothing about how to go about doing it.

I know more today. At least I think I do. But you know what? We are in the early innings of this game of figuring out how stock investing works in the real world. I may not know as much as I think I do. You know what I am going to say I need to learn more, right? You probably have the phrase memorized at this point. I need to see every discussion board and blog on the internet opened to honest posting re the last 40 years of peer-reviewed research in this field.