Timing the Market

Today stock markets are rising around the world. The decline to this point hasn't received much attention outside the financial media. Some bloggers are beginning to notice though that their portfolios are taking a hit. I think that those who are selling out of stock mutual funds at this point are likely to feel better about their decision later in the year. I have been discussing the potential for a significant decline in the markets for a while now on this blog. And many others are coming to similar conclusions. As this article notes though, most individual small investors don't get market timing decisions right. And more sophisticated traders screw up too all the time :) The real solution is to invest in a portfolio of hedge funds of course and outsource that decision making. That can be hard for most individual investors. There are funds of hedge funds that take relatively small investments. The problem with many of these is that the funds willing to take investments from these funds of funds are not the superior hedge funds. Finding a good one takes some research. I know of one exception which is the Everest Brown Babcock fund of funds listed on the Australian Stock Market - sorry that isn't much use for US investors. The other alternative is a truly diversified portfolio with rebalancing and other techniques which I have discussed on this blog, here, here and probably other places.