Valuation-Informed Indexing #576: Six Logical Jumps to a Belief in Market Timing

I’ve posted Entry #576 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Six Logical Jumps to a Belief in Market Timing.

Juicy Excerpt: Two, it is important to understand WHY short-term timing and long-term timing are so different. The reason why long-term timing always works is that the market’s core job is to get prices right; that is what markets do. So, when stock prices travel far from their fair-value level, you can be virtually certain that they will be moving hard in the direction of the fair-value price over the next 10 years or so. So why doesn’t short-term timing work as well? In the short term, stock prices are determined by investor emotion. Investor emotion is unpredictable. There is just no telling what stock prices are going to do over the next year or so.