Mark Hulbert says investors should be wary of timing the market in the next few months.
In his MarketWatch column, Hulbert gives data on how market timers have performed during the past five to 20 years.
“There is today virtually no difference in the consensus stock market forecasts among the best stock market timers and among the worst. That is, the market timers who have successfully timed the market in the past are neither more bullish on balance than the worst timers, nor more bearish,” he said.
Hulbert said the difference is merely two percentage points “between the average recommended exposures of the market beaters and market laggards.”
“This suggests that investors may not want to bet all or nothing on the stock market going up or down over the coming months,” he writes.
Hulbert said the former bullish outlook has already changed.
“The slightly bullish picture that the contrast between best and worst was painting six weeks ago has faded to one that is almost completely cloudy,” he said.
The market’s future is difficult to predict, Hulbert said.
“But, it does mean that, if the market does rise or fall markedly from here, it will have been predicted by just as many losers as winners,” he said.
The Treasury yield curve widened as investors are hedging on an increasing recovery that will boost inflation, Bloomberg reported.
“There is more of a risk of further steepening going forward, especially with the amount of auctions occurring at the end of the year a time when the market will have very little volume,” said Larry Milstein, managing director in New York of government and agency debt trading at RW Pressprich & Co., a fixed-income broker and dealer for institutional investors.
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