Do you mean they make a portfolio that’s too conservative, so that lost money becomes lost utility? Or do they lose in some other way? (This sounds superficially similar to claims that there are stock/futures trading strategies that systematically lose money other than on fees or spread, which I think can’t happen because the opposite strategies would then systematically make money.)
What Liron said. A small number of days accounts for most stock gains. Sharpe concluded that you’d need to make calls right about 74% of the time to win by timing.
There are ways to systematically make money. Diversification, not timing, low time preference, leverage, not being loss averse and other factors allow you to harvest money off of the poorly diversified, the market timers, the high time preference, the leverage averse, and the loss averse over time.
The market on average goes up and every day they have their cash pulled out of the market in an attempt to time it on average loses them money? I think that’s why timing the market fails.
Do you mean they make a portfolio that’s too conservative, so that lost money becomes lost utility? Or do they lose in some other way? (This sounds superficially similar to claims that there are stock/futures trading strategies that systematically lose money other than on fees or spread, which I think can’t happen because the opposite strategies would then systematically make money.)
What Liron said. A small number of days accounts for most stock gains. Sharpe concluded that you’d need to make calls right about 74% of the time to win by timing.
There are ways to systematically make money. Diversification, not timing, low time preference, leverage, not being loss averse and other factors allow you to harvest money off of the poorly diversified, the market timers, the high time preference, the leverage averse, and the loss averse over time.
The market on average goes up and every day they have their cash pulled out of the market in an attempt to time it on average loses them money? I think that’s why timing the market fails.