Wednesday, May 18, 2005


Market Timing vs. Buy and Hold... and Book Recommendations
I'm skeptical about conspiracy theories as a rule, but, for a moment consider the special interests at work against the notion of market timing, and their motivations: Mutual fund managers want you to believe in efficient, completely unpredictable markets so that you will make their lives easier as they spot bargains, trends, and position themselves on the right side of the market. They also want you to believe in efficient, unpredictable markets because most of them cannot beat the market, due to the size of the portfolios they manage, and other factors, so these beliefs reduce the pressure on them to perform.