Bob O'Brien
Head Instructor
bobrien@mywealth.com
As the Dow Jones approaches, the 6000’s, I cannot help but think of one of the great lies behind this financial mess that was sold to the general public. The fact that most so called personal finance experts have told people that “they have to be perfect when they time the market!” Therefore they shouldn’t even think about it and even thinking about would be a living a hell!
No statement could be more false, and in fact, I saw it written again in a recent book written by a so called “personal finance guru”.
The fact that you have to be perfect is incredibly mathematically flawed: The Dow is down about 50% in the last 16 months. If you got out when it was down, 20% you cannot possibly argue that you would be worse off right now. You would have 30% more money for drawing out and going on the sidelines.
If you did this and broke the “don’t time the market” spell that has been cast upon most people, you would be looking at things much differently.
A better example is all the people that decided to sit on the sidelines, instead of buying a house since the peak or near peak of the real estate bubble. They timed the market, and they were absolutely right! That decision to wait will never be regretted by one of them, because the real estate market reacts so slowly to economic conditions they can’t miss! Many hard working people bought homes, because they were told “don’t try to time the market, you have to know exactly when to get back in.” You certainly don’t need to be perfect in South Florida, Las Vegas, Salt lake City etc… right now.
This whole philosophy of having a closed mind to market timing is based upon missing gains, and not missing losses. Why not do both? This is what we teach people to do in our courses! Get signed up today!
To be clear about what I am saying is that anyone who tells you should close your mind to market timing is telling you to be one dimensional! They are telling you that it is more important to make sure you are in the market when it goes up, then it is when it goes down! Even if you have to buy in when the trend is negative! Please refer to couple of blogs that I have written in regards to these points about volatility, and ponzi schemes.
Why I am so confident that anyone can analyze an investment? Market? Currency?
First of all, my years as of experience as a financial planner has shown me that people can get incredibly intelligent in a short time when it comes to their money. If you get intense about any topic, people tend to go into some type of information absorption zone. This is an excellent time to do this and benefit from all the economic news around us.
In addition, financial analysis is not that complicated. Fundamental analysis is basically just asking two questions, does the entity have a lot of debt? Can they continue to generate revenue? It is a little more complex than this, but that is an excellent start!
How about technical analysis? I will be the first one to say that for years, I thought this was garbage! Who wants t study charts anyway? There is tremendous value in looking at the trends, and it can save you thousands! Again not that complicated at all!
We see trends everywhere in fashion, sports and entertainment. Technical analysis is really not that much different. The markets do trend, and trend irrationally sometimes. Being aware of these trend’s floors and ceilings are vital to your overall financial decisions making. We go through this in great detail in our currency course, but the technical analysis for stocks and currencies are generally the same. So a stock trader will feel “right at home” here, while learning even more about what makes currencies different.
People have to be open to market timing! I am not even saying that they should market time, but to know as much as you can about what traders know is only prudent when it comes to managing your money.
The real problem that I have with this is the way this is communicated. There are so many rules to the way we manage our finances with that are taken way too literally. Good investors are flexible and always seeking education!
Please be clear about my message, market timing is difficult, but by not being open to it you will never be able to evolve as investor! Evolve as investor today by signing up for our courses!
Is there an article you would like to see written? bobrien@mywealth.com
Sincerely,
Bob O’Brien
Sr. Instructor
www.mywealth.com
