Tweet

Be Open Minded to Market Timing

Written by: Bob O'Brien

Article Overview: Veteran financial planner explores the myth that blocks people in their evolution to being a better investor.

Be Open Minded to Market Timing

As the Dow Jones approaches, the 6000’s, I cannot help but think of one of the great lies behind this financial mess that was sold to the general public. The fact that most so called personal finance experts have told people that “they have to be perfect when they time the market!” Therefore they shouldn’t even think about it and even thinking about would be a living a hell!
No statement could be more false, and in fact, I saw it written again in a recent book written by a so called “personal finance guru”.

The fact that you have to be perfect is incredibly mathematically flawed: The Dow is down about 50% in the last 16 months. If you got out when it was down, 20% you cannot possibly argue that you would be worse off right now. You would have 30% more money for drawing out and going on the sidelines.

If you did this and broke the “don’t time the market” spell that has been cast upon most people, you would be looking at things much differently.
A better example is all the people that decided to sit on the sidelines, instead of buying a house since the peak or near peak of the real estate bubble. They timed the market, and they were absolutely right! That decision to wait will never be regretted by one of them, because the real estate market reacts so slowly to economic conditions they can’t miss! Many hard working people bought homes, because they were told “don’t try to time the market, you have to know exactly when to get back in.” You certainly don’t need to be perfect in South Florida, Las Vegas, Salt lake City etc… right now.

This whole philosophy of having a closed mind to market timing is based upon missing gains, and not missing losses. Why not do both? This is what we teach people to do in our courses!
To be clear about what I am saying is that anyone who tells you should close your mind to market timing is telling you to be one dimensional! They are telling you that it is more important to make sure you are in the market when it goes up, then it is when it goes down! Even if you have to buy in when the trend is negative!

Why I am so confident that anyone can analyze an investment? Market? Currency?

First of all, my years as of experience as a financial planner has shown me that people can get incredibly intelligent in a short time when it comes to their money. If you get intense about any topic, people tend to go into some type of information absorption zone. This is an excellent time to do this and benefit from all the economic news around us.

In addition, financial analysis is not that complicated. Fundamental analysis is basically just asking two questions, does the entity have a lot of debt? Can they continue to generate revenue? It is a little more complex than this, but that is an excellent start!

How about technical analysis? I will be the first one to say that for years, I thought this was garbage! Who wants t study charts anyway? There is tremendous value in looking at the trends, and it can save you thousands! Again not that complicated at all!

We see trends everywhere in fashion, sports and entertainment. Technical analysis is really not that much different. The markets do trend, and trend irrationally sometimes. Being aware of these trend’s floors and ceilings are vital to your overall financial decisions making. We go through this in great detail in our currency course, but the technical analysis for stocks and currencies are generally the same. So a stock trader will feel “right at home” here, while learning even more about what makes currencies different.

People have to be open to market timing! I am not even saying that they should market time, but to know as much as you can about what traders know is only prudent when it comes to managing your money.

The real problem that I have with this is the way this is communicated. There are so many rules to the way we manage our finances with that are taken way too literally. Good investors are flexible and always seeking education!

Please be clear about my message, market timing is difficult, but by not being open to it you will never be able to evolve as investor and entrepreneur!

Sincerely,
Bob O’Brien
Sr. Instructor

Related Articles
  Always Do A Timing Check Before You Begin A New Venture
  How to Be Open-Minded to New Ideas
  Warren Buffett and his Effect on the Stock Market! Part 2
  Razor cut-through!
  Lesson #2: “You can’t cut grass when it’s covered with snow”

Article Tags: buying a house, dow jones, economic conditions, financial mess, guru, hell, las vegas, losses, market timing, money, personal finance, philosophy, real estate bubble, real estate market, salt lake city, sidelines, south florida
Referred by: http://www.mywealth.com



Related Forum Posts
Re: How should i promote a new website? - ignore this message IF it's already been stated. I haven't had a chance to read all the replies and i have to jet from the office... I suggest marketing where ever your Target Market congregates. If it's a forum of concerned parents - go there. Strike up a deal with the forum owner (JV) and have him promote it to the list of members (Integration Marketing). If you want to go with Forums then i would partner with a parent who is a frequent poster/moderator on a particular Target Market Forum and have him/her add your link to their signature. That was just a thought but it's not as intense once you get buy in from the Forum owner or high ranked poster/moderator. Hope that sparks some new ideas.
Re: Ideas For Business - Hello Lucy, you may consider this list for Ideas for Business: (Top 23 list) Rank Company 1 Google 2 Genentech 3 Wegmans Food Markets 4 Container Store 5 Whole Foods Market 6 Network Appliance 7 S.C. Johnson & Son 8 Boston Consulting Grp. 9 Methodist Hospital Sys. 10 W.L. Gore & Associates 11 Cisco Systems 12 David Weekley Homes 13 Nugget Market 14 Qualcomm 15 American Century Invest. 16 Starbucks Coffee 17 Quicken Loans 18 Station Casinos 19 Alston & Bird 20 QuikTrip 21 Griffin Hospital 22 Valero Energy 23 Vision Service Plan
Re: Do Women Play the Stock Market? - I also play Stock Market.....
Re: High price of entertainment - [quote="TheAnonymousMan":dadh8m1p]Kevin, I went to a Justin Timberlake concert recently where the bottled water was selling for $4 a bottle! I'm talking about the average 600ml bottle that sells for about $1.20 in the supermarket, now that's a rip off but people were buying it because they needed water.[/quote:dadh8m1p] Hi TheAnonymousMan, Can I ask how much you paid for the concert tickets? And more importantly, was the show worth the price? At the Tennis US Open, I had to pay $3.25 for a 500ml bottled water, $8.00 for a "travel size" Hawaiian Tropic bottle of sunscreen, and $13.00 for a Carnegie Deli pastrami sandwich, $4.25 for fries and $2.77 for a Sharpie pen (for autographs), etc... And to make things worse, they don't allow you to carry a backpack for security reasons, so it's very inconvenient to bring your own things to the event (keep in mind I was at the US Open for 7 hours). I mean who wants to carry around 10 lbs worth of stuff (if I were to bring my own necessities like food/water/sunscreen/etc. and have to carry a bunch of souvenirs) in a plastic transparent bag for the whole day?! It's an obvious scam for more profit.
.. - We are the UK Market Leaders.....the first to venture into this on a huge scale. What makes this a success is the simplicity of the product and the price, very affordable to the mass market.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Unspoken Yet Important Rules for Book Proposals

Bootstrapping Your Start Up Business.

The Golden Rule of Communications

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.