Mark Hulbert: Market Timing Is a Fool's Errand

Tuesday, 12 Aug 2014 11:16 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Trying to time the stock market is always a tempting proposition, but rarely a winning one, says Mark Hulbert, founder of Hulbert Financial Digest.

You may think that with the S&P 500 having dropped 3 percent from its July 24 record high, now is a good time to dump your stocks.

But, "even if the market has topped out and you sidestep a decline by getting out of stocks now, the odds of long-term success still are against you," Hulbert writes in an article for MarketWatch. "Trying to time the market is by and large a losing proposition, even for the pros."

Editor’s Note:
Retire 10 Years Earlier With These 4 Stocks


Hulbert Financial Digest studied the performance of 81 stock-market timing newsletters during the last 15 years. Just 11 of them made money in the bear market of 2000 to 2002.

"These market timers have lost so much since then that, on average, they are in the red over the entire period since March 2000, having chalked up a 0.8 percent annualized loss," Hulbert writes.

If one would have used a buy-and-hold approach using the Wilshire 5000, their annualized return, including reinvested dividends, would have been an annualized 4.2 percent.

The problem, Hulbert notes, is that market timers "didn't get back into stocks during subsequent rallies until it was too late."

Some investors don't think stocks are in for an extended decline, "For the most part the market has been pretty resilient over the last week or so," Michael James, managing director of equity trading at Wedbush Securities, tells Bloomberg.

"It has been able to shrug off a lot of negatives and not go lower than it had."

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

Related Stories:

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Dollar's Rally Bad News for Oil, Multinationals

Sunday, 21 Sep 2014 01:17 AM

The asset with the greatest prowess of late has been the U.S. dollar, and if its rally continues, it threatens to eat in . . .

Dollar Has Longest Win Streak in 47 Years Amid Policy Divergence

Sunday, 21 Sep 2014 01:07 AM

The dollar had the longest rally since teenagers bought Beatles albums and Lyndon Johnson was president as the Federal R . . .

FT: Goldman Sachs Reveals Ties to Libya Fund

Sunday, 21 Sep 2014 00:57 AM

Goldman Sachs has admitted in court documents to having used small gifts, occasional travel and an internship to cement  . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved