Did you get out before the stock market slump?

Question

Experts advise against trying to time the market. Did any of you do it successfully?

Dredude52, that's an interesting critique of others' investment strategies. But I want to know, did yours work? Did you know when to get out?

Answer 1

No, I did not. Nor did I attempt to, however. My investments were made with "the long haul" in mind: strong companies with good brands that are leaders in their industry but with room for growth that I believe years from now when I might actually NEED that money will have appreciated significantly.

The first stock that I ever invested in tripled in two years, and I left it right where it is because I personally don't think that I have enough of a clue to guess what's going to happen if the folks in the Wall Street Journal can't do it. I'm fine with the market as it is now. Sometimes you're the windshield, and sometimes you're the bug.

Answer 2

Try it for yourself on a simulator at Investopedia.com

What is your definition of Long-Term? If you had bought anywhere around the 2000 high in the stock market, you would still be waiting to get even after six years, and wouldn't mind waiting another seven years to make a profit if you are truly a "long-term" investor.

The "Buy-and-Hold" strategy really doesn't hold water if you consider it depends on when you "buy." You might go 25 years without a profit, if history is any guide. But if that is your deal, then go for it.

Otherwise, you have to consider that the Dow has again failed at that all-time historical high set in Jan 2000 at 11,721. Looks like a Double Top to me, but some people say we could double that again. Logically, this is one of the scariest markets I've ever seen in two decades of watching it; just pick something that is stable, anything. Doesn't exist, does it. Anything could send this market over the edge to the great void. But hey, it might double too, who knows.

For most people, the name of the game is capital preservation. You don't invest or you get out when the market gets too risky or too frothy or is nearing a market top or an old market top, or when the market is overpriced, or unstable, and all of these things are true today. There really is a time when cash is King. That 1.5% CD is going to look pretty good when everyone else is cryin' in their beer about losses. Or the market could just go sideways to work off the excesses, but either way, you're safe if you're out. Wanna throw the dice, go to Vegas.

Calling someone whom manages risk by getting out of the market is like calling a Jaywalker a terrorist. Most people think there is only one side to the market -- the Up side. Sell short an ETF and play the downside, and quit listening to the "experts" who want you to give them your money so they can get rich "investing" it for you. This is not my idea of "investing." Investing is something active that you manage. "Buy and Hold" does not fit this description.

If you wish to research the “Buy and Hold Strategy” further, or perhaps trade yourself, I recommend two book titles. One is called "Which Is Better, Buy-and-Hold or Market Timing?" The other is "Do You Have What It Takes to Be a Market Timer?" They will give you plenty to think about.

Answer 3

I'm a market timer. I got out fairly close to the top and now have 50% of my funds in 5% money market or 6.5% CDs. BTW, I was in the same position the Wednesday before the United States invaded Iraq when I threw down the hammer.

I'm not a numbers cruncher. I read as much as much as I can about every conceivable subject and then make my plays.

My guess is that the markets will remain stagnant throughout the summer and then the money boys will come back with a vegence after a summer of spending their bonuses.

Answer 4

Yes, but I was lucky. Sold a lot of emerging markets stock 2 days before the market started falling.