No. of Recommendations: 8
A perfect example would be 1987, many of the timing methods would have caused an investor to [mostly] exit equities after black Monday.
Not true.
43 week SMA:
Out on 10/19/87 at 248.22
In on 11/9/87 at 245.64
43 week SMA, for 4 consecutive on weeks:
Did not signal a sell on Black Monday. Next out on 01/03/88
if the investor were recently retired, they would have been mortally wounded by that timing action and it would affect their financial health for the rest of the life.
Yup. My Dad told me years later that the worst investing mistake he had ever made was to panic and call his broker the next day to sell everything.
That's why a timing method that could potentially get you out at the wrong time (once every 50 or 75 years) is risky.
If you live in the wrong times, you will get clobbered. There is nothing you can to do avoid this fact.
In my case, they tell me that if I wait till 70, they will give me $4800/mo, and my wife will get about $2400/mo. Even if we spend (or lose) every penny of our retirement savings, we can still live reasonably on $7200 a month
That's the cool think if you have guaranteed income (pension, SS, etc.) that will supply 100% of your needs.
In that case, it does not matter what happens in your portfolio.
But as long as you have a reasonably diversified investment portfolio, it will NOT go to zero. If it does go to zero, we've hit essentially the end of the world. Because all that guaranteed income will also go to zero.
Pensions in Russia in Jan 1917 didn't last after October 1917. That's effectively an end of the world scenario. Of course, for many it was literally the end of the world for them.
