Thursday, September 23, 2010

Timing Is Everything

As with many things in life, timing is everything in the stock market.  I'm not talking about timing the market itself, but rather the implementation of investment decisions you've made.  You can invest in a stock or an index and be right immediately, or wait ten years until you're proven right.  (If it takes ten years, I'd say you were wrong in the first place.)  It's not just the right call, it's the right call at the right time.  A big part of the problem I've realized belatedly (there's that timing thing again!) is statistical.  Housing starts, unemployment, exports, manufacturing, GDP, Baltic Dry Index, you-name-it; economic indicators ad nauseam can be so disconnected to the stock market that "the market can remain irrational longer than you can remain solvent".  The only indicators that really matter to me are the stock indices themselves.  (Click on the Stockscores Weekly Market Minute at upper left to get an opinion on the current state of various indexes.  Apparently "indices" and "indexes" can be used interchangeably - and annoyingly - even in close proximity to each other.)  The moral of this story: don't listen to economic indicators, and don't listen to me, J.R. - listen to the market.  Now, speak to me Market, speak!