The Art of Investing

There is no need to time the market from 1970 to 2000. From 2000 to 2014, the market crashed two times with an average loss of about 45%. Our simplest technique told us to exit the market on around March 20, 2022.

The apples you picked are sour but some other times they are tasty from the same tree. You pick them at the wrong time for sour apples.

Market timing is about educated guesses. Hopefully we will have more rights than wrongs when we follow general guidelines. It would reduce risk and could benefit us financially in the long run. Recently we have more false signals than before. However, it is better to follow a proven system than not.

Market plunges have losses between 30% and 55% usually. There is a gray area for 20% to 30% losses, which does not happen often. When the market plunges, it plunges hard and fast. My techniques tell you to exit the market and when to return to equities. The techniques are based on falling prices, so they will not indicate peaks and bottoms, but they will help you to reduce further losses.

Within the secular market, there are market cycles. There is a super cycle that I ignore as I find it not too useful.

Every market is different. Today we have excessive money printing that changes all the previous logic such as the average length of a market cycle. However, correlation of the market and the economy will correlate again. Do not know when, but it will. Otherwise, we have to rewrite all the books on investing.

Last Update: 05/2022.
Size: 150 pages (6*9).