Why Are You Still Trying to Time the Markets?

By Damon Gonzalez via Iris.xyz

2017 was the year where almost everything went up with very low volatility. 2018 had two light your hair on fire drops and was dubbed the year no one made money as both stocks and bonds dropped.

The S&P 500 is now up an unbelievable 20% from its December 26th low in less than two months and is now less than 6% from its all time high. Even wilder than that; SLYV, the small cap value ETF my firm uses, is up over 18% year to date after losing 13% in 2018. As Yogi Berra said, “It is tough to make predictions, especially about the future.”

Why Are You Still Trying to Time the Markets 1

If you watched the market in 2018, you needed antacid!I just went to a lunch to learn about how one firm is using artificial intelligence and machine learning to try and beat the market.

It was a great reminder to me of how incredibly difficult it is to beat an index. This team buys cell phone location data to count how many people walk into Starbucks and McDonald’s each quarter. We all want the upside of stocks and none of the downside, but a back-tested model, a fool advertising on the radio, or a spammy newsletter writer are all extremely unlikely to deliver. Trying to time the market is as Larry Swedroe says, an exercise of hope over experience.

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