Everyone has heard the colloquialism, “it’s time in the market, not timing the market” that is the wisest approach to investing. But is this really valid in all circumstances? You may surprised that my answer is only “sometimes” does this make sense. I think it depends on a ton of factors – how much time someone has among other things. Like for an individual who’s already in their mid-eighties, how much time do they have left for some investment to reap a benefit? Unless they’re investing for their descendants they don’t have a lot of time do they? This subject could easily be of novel length so let’s not touch on every single possible scenario as the ands and buts are nearly endless. What I would like you to know is that I do not believe in giving investing ideas forever to work out, so this idea of never try and time the market in my most humble opinion is at least fundamentally flawed, a position I’ll stand by every time against the consensus out there.

Most of us are not able to successfully time returns on investment. I actually had one client that timed the 2008 stock market crash pretty well, selling out just in time prior to the largest drops, but then less than two weeks went by before he called me and frantically asked that I re-invest his money. I had a couple clients over the years that came close to timing the market but suffice to say, these events are very rare. Even if you were able to market time one stock or an entire portfolio correctly prior to a crash or a hyperbolic run-up, chances of repeating that success over and over again are less than nil, really nada. Timing tops and bottoms in markets is virtually impossible to do with any consistency, even for the professionals, which is why Wall St. pundits advise against even trying.

The irony is if your portfolio is being handled by a professional money manager that, in a sense anyway, they do often embark on some type of market timing. Let me explain, back when clients were paying me a fee to manage their portfolios I wasn’t going to have much in their portfolio that I thought could only do well if we could give it five years or more to work out. I mean they’re paying me to show them some progress a heck of a lot sooner than that. So I would only include positions in portfolios that had a very good probability of working out within a 6-month or certainly a one-year time horizon; of course a lot of things unforeseen can happen over the course of one year but I always had the attitude, “I’ll worry about next year, next year”, and that usually worked out pretty well. I’m astonished at some of these idiots interviewed on television telling us how great and wonderful something they tout is going to be as long as we are willing to give it 10 or 20 years to play out. Dude, we could all be dead 20 years from now! 🙂 So if you want to call me a timer for disliking that idea, go ahead then, but I see absolutely no reason to park someone’s money, or construct a portfolio designed to work out 10-20 years from now. Nor do I believe that we should expect great and wonderful things to happen in very short time frames either, so even though I was more “tactical” in my investment approach I was also being realistic. Maybe some piece of my portfolio hadn’t reached its full [intended] potential but as long as it was behaving, acting “nice and polite”, I would maintain the position. But only – only if the factors that I had originally envisioned as the reason for including the position in the first place were still intact. Otherwise, it gets whacked! Again, is that “market timing”? Maybe, but that was my “tactical” approach.

This notion of “factors” that lead to each position’s inclusion in your portfolio remaining “relevant” cannot be understated. That’s where my reliance on “Macro” factors, or macro-economics came in real handy, one has to be able to assess the “drivers” that can take an asset from a lower price point to a higher price point. In the absence of that knowledge folks are going to be unable to discern why something fits or no longer fits inside their portfolio. Capital is [always] a finite resource so never let something into your portfolio unless it fits your purpose, your time horizon, and [of course] your risk parameters. As it only takes one bad shoe to ruin the dance right? Same concept. Once the factors that made that investment a “go” are no longer in place, then the best money managers will reduce or eliminate its weighting inside the portfolio. Again I ask, is that “timing the market”? I think any pundit would call it “timing the market” but only when the entry and exit dates happen within a very short span of time? That’s just the thing, I think every one of us does indeed “time the market” from time to time, [no pun intended], but it’s the reality of the situation.

This all leads me to extrapolate on the current state of affairs in regards to the investing landscape I [personally] see us in today. I’m sad to report that I have lost my taste for loading up on much of anything in this post-Obama 2.0, otherwise known as Biden-Kamala, a dastardly mess of incompetence across the full spectrum of public policy oozing out of Washington, D.C. then spreading to a town near you. Bad public policy from the top eventually works its way down to the corporate level where it begins to rot the outlook for profits and what happens next is it begins to erode investor confidence, job security and the relative quality of life for all Americans. You know what they say? “Shit rolls downhill”, and it’s so true!

I want you to notice that the only asset prices climbing happen to be positions that are a bet against an otherwise sustainable U.S. economy. Super-inflated food and fuel prices, how sustainable is that? How long can this commodity price inflation last? Wait because there’s more and more talk from Democrats scheming to add yet more regulations and higher taxes on the way, which only does what? Destroys jobs and makes scarce things even more scarce, further exacerbating commodity price inflation. On the other hand, stock prices will rise only under tame, orderly inflationary pressures because corporate earnings will generally climb during relatively uniform, or modest inflationary pressures. In the absence of that “secret sauce”, you’re pretty much done. So how long can this rising inflationary environment last without a total implosion of the economy? From my perspective, not long. From shaming fossil fuels to scarce electricity and heating oil, to open borders to free-flowing drugs and terrorists by the hundreds of thousands crossing into our country and being transported everywhere – how sustainable is this? From over-priced equities to over-priced U.S. Government Debt, to Democrats who have screwed up virtually everything that makes a capitalist society operate efficiency… and now they want you and me to pretend nothing has changed and we should continue to invest our hard-earned cash into all their failures and their woke corporations? I don’t think so! Financial markets inside Socialist countries do not earn rich valuations such as we have enjoyed under free enterprise rules in America; where price-to-earnings ratios (P/E’s), North of 20 times earnings, and even higher were quite common. What many people seem to forget is that Socialism restricts the ability of corporations to make excess profits, therefore, they should not expect to see their assets trade @ premium valuations any longer. I saw where the current index of the S&P 500 companies is trading around 21 times earnings, still. Going forward under Socialism that number should certainly stay below 10 times earnings in my mind understanding the fact that Leftists/Progressives/Socialists/Democrats earn nothing but the bear-est of bear markets… LMAO!

1

Error happened.