06-01-2014, 11:57 PM
(06-01-2014, 05:27 PM)Kerim Wrote: I don't blame you at all, daat. But just to play devil's advocate (and perhaps to completely contradict myself), a lot of people rightly believe that time IN the market is far more important than timING the market. The idea is that even if valuations are high right now, you are still missing out on dividends and growth in the meantime -- there is a real cost to waiting.This is very true indeed.
I'm not attempting to time the market, I'm just trying not to time the peek before a huge fall.
The way I see it is that there are too many experienced traders screaming 'it's going to blow" while too many newbies rush into the market.
I can't shake the story I heard about a guy (you probably know who he is, I don't recall his name) who sold everything he had because the person that was shining his shoes started to give him stock advice just before one of the major market drops.
I figured that if I invest now and lose 40% of my capital due to investing in companies that may cut dividends (which triggers my immediate sell signal) than I won't be able to recover this lose in a very long time.
The dividends gain I may have in case the companies won't cut dividends doesn't provide sufficient incentive for the risk involved.
Besides, I have my money stashed away in bonds for so long so I doubt the extra caution time for even 6 months will hurt me more than the past 10 years.
As of now I want to see if the market breaks from its all times-high into a newer growth trend or not.
Until I'll see such a signal I'm going to wait (im)patiently.