I distinctly remember considering dabbling in some market timing during the early Covid days of 2020. I remember watching the market continue to trade around ATH into mid-February of 2020, while I had been convinced for at least 2 weeks that the pandemic would not be contained to China and would eventually spread globally. I was constantly second guessing myself: "What has already been priced in?" "Do people really not expect this to be a major event?" "Am I getting bad information?" "Am I just overreacting because I'm more concerned about this than others?"
I ended up concluding that I was, in fact, overreacting, and held through the (extremely short) crash/recovery cycle.
The market can often feel like it's gaslighting you if you correctly anticipate a major event. But it is more likely to humble you, because there's always something to worry about, and most things that might feel scary to you end up having very little effect on the market.
Thanks for sharing. It continues to blow my mind how quickly the S&P recovered and blew through new record highs in 2020.
And market timing is incredibly tough, especially when you're trying to time tops and you still have many years in your investment time horizon. Not only do you have to know when to sell. You also have to know when to buy. Sometimes you find yourself selling only to buy at a much higher price.
I've never had the guts to really go for it with timing, and that's probably for the best for me, financially. I eventually wised up and wrote myself I personal investor policy statement, so that I can listen to my previously rational self, and not make fear/greed based decisions in the moment.
It does include a small amount of timing, where I allow myself to get aggressive and move into 3x leveraged S&P500 funds after a 10%+ drop from all-time highs. So, as of last week, about 10% of my brokerage holdings (which is only around 15% of total invested assets since most are in tax-advantaged accounts) are 3x leveraged, while the rest are in regular indexes.
I distinctly remember considering dabbling in some market timing during the early Covid days of 2020. I remember watching the market continue to trade around ATH into mid-February of 2020, while I had been convinced for at least 2 weeks that the pandemic would not be contained to China and would eventually spread globally. I was constantly second guessing myself: "What has already been priced in?" "Do people really not expect this to be a major event?" "Am I getting bad information?" "Am I just overreacting because I'm more concerned about this than others?"
I ended up concluding that I was, in fact, overreacting, and held through the (extremely short) crash/recovery cycle.
The market can often feel like it's gaslighting you if you correctly anticipate a major event. But it is more likely to humble you, because there's always something to worry about, and most things that might feel scary to you end up having very little effect on the market.
Thanks for sharing. It continues to blow my mind how quickly the S&P recovered and blew through new record highs in 2020.
And market timing is incredibly tough, especially when you're trying to time tops and you still have many years in your investment time horizon. Not only do you have to know when to sell. You also have to know when to buy. Sometimes you find yourself selling only to buy at a much higher price.
I've never had the guts to really go for it with timing, and that's probably for the best for me, financially. I eventually wised up and wrote myself I personal investor policy statement, so that I can listen to my previously rational self, and not make fear/greed based decisions in the moment.
It does include a small amount of timing, where I allow myself to get aggressive and move into 3x leveraged S&P500 funds after a 10%+ drop from all-time highs. So, as of last week, about 10% of my brokerage holdings (which is only around 15% of total invested assets since most are in tax-advantaged accounts) are 3x leveraged, while the rest are in regular indexes.