Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Yet another article that shows how Rob Bennett is wrong for pushing his get rich quick timing scheme.
https://awealthofcommonsense.com/2022/06/timing-a-recession-vs-timing-the-stock-market/
Market timing is price discipline, nothing more and nothing less. If you are not timing the market, you are not exercising price discipline when you buy stocks. How could that possibly be a good thing?
It’s true that there is no way to anticipate the dates when prices will turn. Prices are determined by shifts in investor emotions. How is anyone supposed to predict those shifts?
But so what, you know? If prices are higher, risk is higher. So you lower your stock allocation to the extent needed to restore your risk profile to what you wanted it to be. When you do it that way, timing works on the day you make the allocation change. How could it ever not work?
My sincere take.
Rob
Name one person who has had a successful retirement using market timing.
Every investor who has tried it going back to the day that the market was formed. The peer-reviewed research that I co-authored with Wade Pfau shows that beyond any doubt whatsoever. Market timing (price discipline!) dramatically reduces risk while also dramatically increasing return. That’s investor heaven!
Anyone who suggested that it might not always be necessary to exercise price discipline when buying cars or bananas or cell phones would be laughed out of the room. Price discipline is the thing that makes markets work. Discourage people from engaging in it and you will render the market in which you do that dysfunctional. Witness today’s CAPE value of 31 in the stock market.
Rob