Fisher on the Perils of Market Timing

In his latest Forbes column, Ken Fisher says that fund investors who try to time the market play a dangerous game. “Plenty of funds have fine long-term returns despite being tax inefficient and generally costly,” Fisher writes. “But a dirty secret is this: Average, no-load fund investors do much worse than the funds — or the market. How? Why? Because the commission-free funds are so convenient that folks trade much too often, making their moves… Read More

New Study: Investors Fail Timing Test

According to a new study, mutual fund investors don’t just tend to buy high and sell low — they also tend to do so shortly before the stock market reverses itself, causing them to get hit by big losses and miss out on big gains. The study, highlighted by Mark Hulbert in his latest New York Times column, is entitled “Measuring Investor Sentiment With Mutual Fund Flows,” and was performed by two professors and a… Read More

Why Buy & Hold Isn’t Dead

Validea CEO John Reese today writes for MSN’s Strategy Lab that those proclaiming the death of buy-and-hold investing are premature in their claims — very premature. Buy-and-hold has a two-century-plus track record of success, Reese says; for market-timers to claim that the approach is “dead” after one very bad year or so just doesn’t make sense — especially now, before market-timers have faced their toughest challenge. “If the riskiest part of market-timing involves missing the… Read More

Is Buffett Market Timing?

Warren Buffett stated in his recent New York Times Op-Ed that he had begun buying U.S. stocks for his personal portfolio, in which he previously held only Treasuries. Does that make him a market timer of sorts? Morningstar’s John Coumarianos offers some interesting thoughts on that question, focusing his answer on the difference between value investors, like Buffett, and market timers or traders. Value investors, like Mr. Buffett and others, look at investing as buying… Read More