Hulbert: Stay in Equities Through a Bear Market

In his column for Barron’s, Mark Hulbert reports that his analysis shows that “the best bear market strategy may very well be to stay 100% invested in equities.” He says that looking at the data on Hulbert Financial Digest-monitored advisors suggests this approach because “each of the top-five advisors for performance since March 2000 is fully invested right now” and those who switched to cash during the 2000-02 and/or 2007-09 bear markets “failed to get… Read More

Top Market Timers Are Bullish

Mark Hulbert reports at Market Watch that, based on his survey, “the stock market timers with the best records are bullish, on balance, while those with the worst records are bearish.” He notes that this remains true when periods ranging from 12-months to 20-years are used to assess performance. Further, “since the stock market over [the last 12 months] has declined by about 10%, and turned in one of the worst Januarys in years, bearishly… Read More

Lessons from Granville’s Error and the Risks of Market Timing

Barry Ritholtz, founder of Ritholtz Wealth Management and columnist for Bloomberg, briefly recounts the story of Joseph Granville to convey the risk of “1) try[ing] to time markets; 2) tak[ing] ourselves too seriously; and 3) refus[ing] to acknowledge our fallibility.” Granville rose to prominence in the 1970s and had a series of prescient calls by 1981, when 16,000 people were paying to subscribe to his advice and the Wall Street Journal described his newsletter as… Read More

Morningstar’s Rekenthaler on Modest Market Timing

John Rekenthaler of Morningstar considers the case for modest market timing and concludes that “market-timing can be one of many useful items on an investor’s ‘shelf.’” Reviewing an article by Cliff Asness, Antii Illmanen, and Thomas Maloney, he concedes that they offer a reasonable case for a modest approach to market timing, despite Rekenthaler’s own previous arguments against timing. The modest approach advocated by Asness et al. includes not only the familiar long-term metrics (such… Read More

AQR Tests Market Timing Techniques, Helping to Boost Long Term Returns

  A recent article by Cliff Asness and colleagues from AQR Capital Management challenges the academic finance recommendation to avoid attempts to time the market. “Sinning a little,” Asness and colleagues suggest, can boost returns.  Among other things, they suggested trimming exposure to stocks in October 2015, as the article went to print, by holding more cash. The article uses two core factors – valuation, measured by the cyclically adjusted PE (CAPE) factor made known… Read More

A Disciplined Market-Timing System That Nearly Doubled The Market Over Four-Plus Decades

Trying to time the market often leads to big problems for most investors. But Validea CEO John P. Reese says that, in the hands of a highly disciplined investor, a rules-based market-timing strategy can yield stellar results, as it has for him. “With market timing, the danger is less about the activity itself and more about how you go about it,” Reese writes in a column for Proactive Advisor magazine. “Many market-timers have little knowledge… Read More

Will The “Death Cross” be the Death Knell for the Market?

Technical analysts have long followed the so-called “Death Cross” as a leading indicator to predict a future market decline. The Death Cross occurs when the S&P 500’s 200 day moving average dips below its 50 day moving average. This occurred last Friday for the first time since 2011 and it begs the question of whether the Death Cross has been a good predictor of future market returns historically. The Irrelevant Investor blog (vis Barry Ritholtz)… Read More

Hulbert: Market Timers Heading For Exits, Could be Sign Bull Has More to Run

Market timers have been notoriously wrong over time and their current positioning could indicate that the recent bull market isn’t over yet, according to Mark Hulbert of Marketwatch. Hulbert’s Nasdaq Newsletter Sentiment Index tracks the positioning of market timers he follows who focus on the NASDAQ. At the end of last week it reached an extreme low level of below -50%, indicating that the market timers he follows are over 50% short the market. Given… Read More

Hulbert: Buy and Hold Still Wins

If you’ve spent time lately trying to figure out when the four-plus-year bull market will come to an end, Mark Hulbert has a message for you: Stop kidding yourself. “The vast majority of professional advisers who try to get in and out of the stock market at the right time end up doing worse than those who simply buy and hold through bull and bear markets alike,” Hulbert writes in his MarketWatch column. “Even those… Read More

Buy-and-Hold Still Working in “New Normal”

While many have claimed that “buy-and-hold investing is dead” in recent years, Validea CEO John Reese says in his latest column that the approach continues to work better than many market timing approaches — even during the alleged “New Normal”. Reese points to multiple studies showing how market-timers have struggled in both the shorter and longer term, as well as his own success with long-only fully invested approaches. “Take my three top-performing Guru Strategies (investment… Read More