Market Timing is Impossible

From Rick Ferri.  I really like his posts.

“Investment managers who time markets have no more success than a coin flip. New analysis by CXO Advisory Group looked at weekly adviser equity positioning from a group of active advisers and compared their posturing to the S&P 500 one week later. The data reveals plenty of action, yet this activity has resulted in no benefit to clients overall, and this was before trading costs and advisory fees.”

Are these managers aware of this?  How do they justify it?  Wouldn’t they rather be golfing or exercising or watching reruns of Rocky & Bullwinkle, or pretty much anything else?

Then again, he is looking at managers who are trading inside a week’s time.  What about checking in a month, or a year?  If you look at CAPE based strategies, you would need to look at performance over much longer time periods than a week.


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