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URL:  http://boards.fool.com/zonties-wrote-market-timing-is-very-21664594.aspx

Subject:  Re: What to do with a losing IRA Date:  11/27/2004  11:14 PM
Author:  rkmacdonald Number:  43316 of 76095

Zonties wrote:
...market timing is very complicated (you will second guess yourself a LOT). I think it is more feasible on a) individual stocks, and , b) if you have a lot of time on your hands.

I invite you to read the following books, written by some of the most highly respected financial experts:

'A Random Walk Down Wall Street' by Burton Malkiel

'The Four Pillars of Investing' by William Bernstein

'Common Sense on Mutual Funds' by John Bogle

These books are filled with historical evidence that proves beyond any doubt that it is impossible to reliably time the market over long periods of time. In the 'Random Walk...' Malkiel investigates all sorts of technical analysis methods and effectively debunks them all. He shows that charts are totally meaningless, because historical market movement has almost no bearing on what will happen in the future. All the trading systems that do work, work only for a very short period of time until any advantage is arbitraged away by professionals.

However, for me, i've done very well buying and holding HGs and making a lot of money. I got angry over the summer and got pissed, and i sold a lot of my hidden gems. they are up a lot more now. But i made most of the (potentially lost) money back through daytrading. BUt now since i am back in school it is much harder to do that. So i guess my market timing experience was fairly unsuccessful.

However there is one thing i have learned. When everyone is bearish, be bullish. When everyone is bullish, be bearish. It is not easy to time the market and my results have been mixed. However many have professed to doing it, and doing it successfully. I am a new trader


Lots of people get lucky and beat the market for several years in a row, just like throwing a string of heads in a coin toss. However, in the long term, the law of averages will eventually prevail, and the market timer will lose out to the overall market.

After you read at least Malkiel's book, come back and let us know what you think then. I'm willing to bet that it will change your entire perspective on day trading.

Trying to beat the market is lots of fun, and I do it with a small amount of money, but it is certainly not what you should be doing with the bulk of your retirement money.

Russ
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