Is market timing possible?
Market timing has a bad reputation. We associate it with shady characters. But we use timing lots of ways. We time our commutes, we use kitchen timers. Why should stocks and bonds be different?
I started out as a bond trader for a bank. I still have my old trade blotter, where I entered my positions and their profits or losses. It was a tough job. Every day I would come in, stare at my screens, and buy or sell. A good call could make my month. And bad news could wipe that out.
It’s hard to buy and sell profitably. Because of the way the market works, you have to be right more than 2/3rds of the time. It offers potentially huge rewards, but they’re mostly a mirage, fading away before they’re reached. The safest market call is the one J.P. Morgan once made: “The market will fluctuate.”
Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!