Market Timing Your Portfolio

I can’t think of a single person who actually believes that diversification (instead of market timing) is the key to good investing even though this would have gotten the average investor through the 2008/2009 Apocalype/Phoenix Rising episode in fine shape. I guess investment managers must justify their existence by convincing clients they have built a better mouse trap.
Check this out:

Ten U.S. fund managers seek holy grail
Ten U.S. advisory firms with combined assets over $9 billion say it isn’t. They are pooling resources to comb through reams of market data to see what investors may have missed in the run-up to the great meltdown to try to anticipate another one.
They have dubbed their effort the Tactical Think Tank (TTT). See Factbox for a list of the 10 firms.
“I know that advisers are looking at what happened in 2008 and saying, ‘If we had a scenario like that again how do I do a better job for my client?'” said Christopher Cordaro, owner of RegentAtlantic Capital, a Morristown, New Jersey-based investment advisory firm and a member of the TTT.
Asset prices fell across the board in 2008, with the S&P 500 posting its worst year since 1937. There were few places to hide, as most markets were badly damaged. Holding diversified assets or hiding in more defensive equities was not enough.

MORE: Fund charges exposed as fees outstrip returns
RELATED: Myth Busted: Trading for a Living


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  1. I am convinced trading is an addiction and investing takes discipline like everything else worth pursuing in life. Trading can be done with discipline also but the two should not overlap as you are trying to teach us. I still have not got the discipline and keep partially hedging my portfolio. Back to the whips and chains for me. Wm

    • Don’t be too hard on yourself. The nature of the markets is that we can never know the future and this uncertainty doesn’t sit well with human nature. On one hand, people fear losing. On the other hand, people fear of losing out. The key is to know that is how things work and avoid the biggest two mistakes: buying at the extreme high and selling at the extreme lows.

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