Time "in" the market: is there a loophole?

[tech/a]

OK. So much cheaper, although either method is pretty cheap.

What if the market suddenly went against you? You shorted the SPI, the market suddenly turns around and goes up, you hold the futures for 'x' days to see if it's an actual change in market direction or not. Presumably, you need to buy back the futures now putting you at a loss.

With the "all share" method, if the market corrects upwards, there's no further cost to you because you're in cash. There is the "opportunity cost", of course, since you've missed out on a few days of growth.

Yes a mouse click and your out
Losing $75 a tick on the wrong side
But your $200k portfolio would have
recovered some of the loss If not all.

 

[systematic]

Do you think your chart paints a somewhat different picture when compared with techs?

I'm not sure...it's all food for thought. However, including total return is (for some reason) often forgotten. When included, the 'ride' is (obviously) a less volatile ride (in a market yielding somewhere around 4%). The charts I posted I think do paint a somewhat different picture...for some people. Some would look at that and say it was a pretty smooth ride to a 10% per annum return. Of course the investor had to have been lucky to have started 10 years ago and miss the downturn (but that was the time period looked at). It was probably more a, 'don't forget the total return'...including your post of the all ords in your third post in the thread. Not a big deal, just something to point out. I've noted the same in our fun thread that @Bill M runs on the all ords.

Now, aside from all that... @tech/a makes a great point - that especially shorter-term traders should remember. You always spend lots of time 'under water'. Making new equity highs every day, week, month etc would be nice - but it's not going to happen.
Trying to reduce the depths of the dips is obviously what market timing is all about, enabling the trader to put their capital elsewhere, until they return.

 

[Zaxon]

However, including total return is (for some reason) often forgotten. When included, the 'ride' is (obviously) a less volatile ride (in a market yielding somewhere around 4%).

I totally agree. Total return is rarely mentioned, and dividends (particularly in Australia) make up a significant part of the return.

You always spend lots of time 'under water'. Making new equity highs every day, week, month etc would be nice - but it's not going to happen.
Trying to reduce the depths of the dips is obviously what market timing is all about, enabling the trader to put their capital elsewhere, until they return.

Yup. And where do you park your capital while waiting to reenter the market?

 

[tech/a]

And where do you park your capital while waiting to reenter the market?

See short SPI example above.

Park it there!

 

[Zaxon]

See short SPI example above.

Park it there!

OK. And in a bull market, if you were controlling your portfolio heat and waiting on positions to break even before opening new ones, you would buy (rather than short) the SPI with your unallocated cash?

 

[tech/a]

Your condition for Buying back is waiting until the portfolio is back to higher than when you exited.
(Based upon theoretically holding the portfolio--although you didn't).?

If so yes you could.

You are again in the space of string theory. Picking a turn--long term---if you were that good
you'd simply re enter your whole portfolio.

You need tested conditions for these trades.

 

[Zaxon]

Your condition for Buying back is waiting until the portfolio is back to higher than when you exited.
(Based upon theoretically holding the portfolio--although you didn't).?

Personally, I'd use MA crosses to determine the direction of the market. Certainly not an exact science, but I feel it has the potential to time the market.

By contrast, I feel that if you sold out, continued to hold that portfolio hypothetically, then rebought when the price level was regained, then you may have well just held the portfolio the entire time - the outcome would be the same.

 

[tech/a]

Zax

When you try this you'll gain some experience.
We can hypothesize all day!

 

[aus_trader]

One possible loophole that long term shareholders enjoy is lower capital gains tax if shares are held for more than a year. Rarely applies to me because I tend to move in and out of stocks more frequently so it's rare a stock that I hold continues to gain higher ground and be held more than a year.

Since the thread was about 'loophole's' I thought that's something that long term holders may enjoy.

 

[Zaxon]

Rarely applies to me because I tend to move in and out of stocks more frequently so it's rare a stock that I hold continues to gain higher ground and be held more than a year.

Same. I've moved to shorter time frames of late, so it's a while since I've had a 12 month stock.