[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.