Avoid market timing

Hi Mr Tan,

While I appreciate your insights into many insurance issues (especially buying term insurance), your market timing posts are certainly not among them; in fact it could be detrimental to encourage market timing.

If an investor has an investment plan, stick to it. (If you don't have one, create one!) Market timing is not going to work.

Many writers have already documented that market timing does not work. Read up John Bogle's book in more detail if you must or ask him personally if you managed to get to meet him in future.

indexfundfan

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MY REPLY:

You are right about John Bogle's advice to avoid market timing. He advised to stay invested all the way. I generally follow this principle.

I wish to make an exception in this instance (when the market is irrationally exuberant). I have seen what happened when foreign funds move out of a small Singapore market. (This situation does not apply to America or the global market).

There is a difference between "market timing" and "strategic asset allocation". I shall write about it in a separate posting.

You are also right about "market timing". Half of the time, one will get it wrong.

You can get to read my views in my website, Ask Mr Tan. Look for point 7 in Investment Tips, April 2007.