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.
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.