[the_doctah]

Any time I ask on some financial forum about moving a chunk of investments to cash I get told that would be stupid, don't try to time the market, and just keep buying.

I would have saved myself a bunch of losses if I had done it when I was thinking about it.

[mirceal]

You cannot time the market.

When you have invested in something, did you do your DD or did you do it because everyone else did it?

I would recommend a book called "the intelligent investor". I also recommend low fee mutual funds that track the market as the default thing to invest. Once you educate yourself more you can make more sophisticated investments.

I also don't have anything against speculative investments. Just don't call it investing. It's gambling and it's fine as long as you know what you are doing and are okay with basically losing most (everything) you put in.

[rebelos]

> Once you educate yourself more you can make more sophisticated investments.

There are countless well-capitalized and mostly underperforming hedge funds that were built on this premise.

[shrimpx]

“Don’t time the market” is stupid advice. The problem with that advice is that virtually every action you may or may not take is a form of timing the market. People going all in “now as opposed to later” are timing the market. Dollar cost averaging is timing the market. Staying in the market instead of selling is timing the market. People encouraging you to stay in the market because if you sell, that’s “timing the market,” are bullying you into adopting their own strategy for timing the market.

[maigret]

> Dollar cost averaging is timing the market.

No this is the exact opposite. It’s like passive vs active https://www.investopedia.com/terms/m/markettiming.asp

[shrimpx]

That definition is incomplete. It makes it sound like you have to be constantly moving funds around to time the market, vs "buy and hold".

But you can certainly time the market using "buy and hold", by waiting for the right moment to buy. And even if you buy "asap", you're still employing a market-timing strategy, that "buying asap is better than buying later".

Dollar-cost averaging is a form of timing the market, because you're effectively reasoning that fixed-interval purchase will fare better than lump sump or other strategies. You're still predicting market behavior.

Good resource:

https://youtu.be/w_aOERmUWdA

[maigret]

> you can certainly time the market using "buy and hold", by waiting for the right moment to buy.

Yes that is timing the market because you wait for a certain time point, as opposed to just buy once you have enough liquidity.

> Dollar-cost averaging is a form of timing the market

No it’s not. It’s like saying passive is a form of active investment because some group of people pick the stocks that come into an index. Timing the market is betting on a given change, while dollar cost averaging is based on empirical analysis and is independent of the events the investor thinks will happen.

I mean the difference is actually simple and clear. One investor is telling “I bet something will happen soon“, the other “I have no idea what will happen”. It could hardly be more clear cut.

[shrimpx]

There’s a contradiction in your analysis: you have no idea what will happen, yet make decisions guided by empirical analysis. You’re literally making a bet that the future is likely to behave in patterns according to the empirical analysis. How is that not a form of timing?

I think the confusion arises when we split hairs, that timing is predicting explicit events, or on a short time scale. But I want to zoom out: making decisions based on large scale patterns and trends, including “the s&p always goes up over a long time”, or “the future tends to behave like the past”, (things that are absolutely not guaranteed to happen, and require belief and betting), is a form of timing.

[331c8c71]

IMHO a more precise way to put it is that by choosing one investment strategy vs another one implicitly makes assumptions about the market.

There's also the emotional side we are kind of neglecting here.

[daydream]

Even God Couldn’t Beat Dollar-Cost Averaging - https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... Made the rounds here a couple days ago.

“Don’t time the market” is most certainly not stupid advice.

[1270018080]

The caveat to "just keep buying" is that you shouldn't be buying individual stocks. As a retail investor, the best you can do is get lucky and confirmation bias yourself. Acknowledging you don't know what you're doing is the first step to success.

[paxys]

When would you have sold? When the market was at its "peak" in 2011? Or 2014? Or 2015? Or 2018? Or 2020?

[the_doctah]

The first time Netflix stock ate shit, so in January.

[quickthrower2]

Why Netflix? I stopped my Netflix to use Amazon Video. Bad for Netflix but still good for streaming and tech.

[the_doctah]

It was just something exacerbated the feeling I had at the time that the market was turning downwards. Not anything to do with Netflix necessarily, there were other tech stocks turning downwards at the same time. But that first big Netflix drop had a different feeling to it.

Not to mention, the insane stock price gains in tech in general had all but stopped, NFT scams were at there height, and it just looked like things were going south to me. Turned out my feeling was right.

[TSiege]

Same. In December I had the urge to sell a bunch of stocks for the sake of cash and peace of mind because the whole market seemed wildly unsustainable. But the "don't time the market" kept being shoved in my face by friends and family. Who could've known /s

[quickthrower2]

Conversely I missed out on $300k gains maybe by selling an asset too early in 2018 thinking a blip back them was the crash.

[Trasmatta]

> I would have saved myself a bunch of losses if I had done it when I was thinking about it.

Or, alternatively, you might have cashed out when you thought you should, then completely missed the bottom trying to time it, then sat on cash for years, watching it lose value to inflation anyway.

[twic]

I sold off a large pile of stocks for tax reasons just before the end of the UK tax year. That also turned out to be roughly the top of the market. So maybe you can time the market, but only if you're not trying to time the market?

[bonoboTP]

Keeping your money as cash is also an investment. It's not a guaranteed value preserver, inflation can eat it. So in the end it comes down to trying to predict the future, just like everyone else is trying to do. There is no guarantee, cashing out can make you lose or make you win.