Time
pickers also known as market timers, mistakenly
think they can predict the future direction
of the market. In their effort to time the market,
they attempt to be invested in stocks when the
market’s going up, and shelter investments
in safe cash, treasury bills or bonds when the
market’s going down.
Step 4 : Program Overview
For
each period, the large gains or major losses
for the entire period are highly concentrated
at the right and left tails, making it impossible
to consistently identify them in advance.
In other words, it is impossible for time
pickers to consistently outperform the market. Wealth
is not created by purposeful market timing.
There may be cases where one got lucky for
a while, but that is not a reliable strategy
for long term investors.
