All of that information is from the Passive Investing Era, Mike.

Investors obviously are not going to be able to engage in effective market timing if we don’t tell them how it is done. If we all felt free to tell them how it is done (that long-term timing always works and that short-term timing never works), we could change the realities of timing and of stock investing overnight. If investors knew the realities, they would be sure to engage in the form of timing that is required for long-term success (long-term timing) and to refrain from engaging in the form that doesn’t work (short-term timing).

The claim that “timing never works” is the claim that causes all the problems. This claim has caused millions to refrain from long-term timing, which of course causes them to suffer bone-crushing losses in the long term. The bone-crushing losses in turn force investors to engage in short-term timing (which never works) to salvage what’s left of their portfolios.

We’re caught on an emotional treadmill that begins with the demonstrably false and yet often repeated claim that “timing doesn’t work.”

Rob

You shouldn’t say this if you are not willing to look at the historical record and check whether it is so, Mike. We have data going back to 1870. The entire record shows that long-term timing always works. There is not one exception. The statement “timing always works” is every bit as true as the statement “timing never works” (the same record that shows that long-term timing always works also shows that short-term timing never works).

Rob

A. I would have extra cash later to put towards savings for an emergency.
B. This lump sum wasn’t all the extra cash I had.
C. The market had nowhere to go but up significantly in the long run, and would likely rally in the short run significantly.
D. I could pull some money out of a Roth IRA penalty free if I absolutely had to.

Conventional wisdom would have been to build the emergency fund first, but I decided to be more risky and do that.

Turned out to be a solid choice. I’ve socked away more money in my emergency fund since then, although it’s still not completely built to where I want it to be, but I’ve also made an almost 20% return on my IRA money already in four months.

Normally, I don’t believe in “market timing”, but decisions like mine where it’s long run focused and pretty obvious you’re going to likely do well, how can you not? I’m an Oblivious Investor, but not THAT oblivious…