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« Putting Things In Perspective | Main | 2% Days »


Yes, a timer will miss out on the strongest up days because they usually occur after the strongest down days; a good timer will not get fatally whipsawed by the markets. But your conclusion that you will end up with the same amount of money as buy&hold is rather cavalier. If a timer can hold his draw-down in a bear market to say –20%, while the B&H investor takes a –35% hit, the timer has a much better shot of recovering quicker than the B&H.

Risk management is the key, and most B&H investors are pretty lousy at controlling risk (see Janus funds, Putnam funds, et al in the early 2000s).

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