Opinion: Most top market timers are bullish on stocks
Best hitters are stepping up to the plate
Getty Images The stock market timers with the best track records are treating the market's carnage as a buying opportunity — while the timers with the worst records are not.
That's good news on the theory that the best performers are more likely to be right than the worst ones.
The news becomes even better in light of the consistency which the best timers are more bullish than the worst ones: Regardless of the time period over which I measure performance, the best timers on balance are stepping up to the plate — not just in their own right, but also in contrast to the worst timers.
Take a look at the accompanying table, which reports this best-versus-worst contrast over six time periods, ranging from as short as the last 12 months to as long as the last 20 years. For each time period, the top timers are those on the Hulbert Financial Digest's monitored list whose stock market timing advice puts it in the top 25% for risk-adjusted performance over that particular time period. The worst timers are those within the bottom quartile. The negative exposure levels for the worst timers means that they on average are net short the stock market.
| Time period over which performance is measured... | Average current equity exposure among the top quartile of timers | Average current equity exposure among the bottom quartile of timers |
| 1 year | 87% | -7% |
| 3 years | 93% | -12% |
| 5 years | 80% | 16% |
| 10 years | 80% | -0.2% |
| 15 years | 83% | 13% |
| 20 years | 72% | -15% |
| Average | 83% | -1% |
Notice that, on average, the timers in the top quartile are recommending an equity exposure level that is 84 percentage points higher than among the bottom timers — who themselves, on average, are completely out of stocks.
It's important to stress that this best-versus-worst contrast is more helpful for intermediate-term guidance than for short-term market timing signals. Just prior to the market's sharp correction in April 2011, for example, the best timers were also more bullish than the worst ones. The Dow Industrials DJIA, -3.57% nonetheless proceeded to fall 16.8%. (Some of you may be willing to excuse the top timers' failure in that case, given the market's subsequent sharp recovery: One year after the decline commenced, in fact, the Dow was higher than where it stood before.)
Posted by: sarah_oz@yahoo.com
| Reply via web post | • | Reply to sender | • | Reply to group | • | Start a New Topic | • | Messages in this topic (1) |
Belum ada komentar untuk "[TSP_Strategy] Market Timers Bullish"
Post a Comment