In this video, I review two simulators to try and see if one can predict the stock market using randomly selected historical data from actual markets. Once you see how futile trying to time the markets is, I provide some food for thought on how you can be a more successful long-term investor.
When you see the stock market in the news, remember you are looking at 100% equity stock indexes. A proper portfolio will be diversified across multiple markets and asset classes. The reason buy and hold can work so well, is that it's hard to beat and is simple to understand.
00:09:25
Timestamps
- 00:00 - Intro.
- 01:00 - Most dangerous words in investing.
- 01:15 - Action Bias.
- 02:45 - Why market timing is so hard.
- 04:15 - "Easy" market timing simulator.
- 05:00 - "Hard" market timing simulator.
- 06:08 - Is your portfolio more conservative than a single index?
- 07:00 - Stress testing a Balanced Portfolio vs. a Stock Index.
- 08:15 - Why a balanced portfolio might work better for some.
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