Serious market timers sold completely out of stocks at some point during the recent market crash. Some have bought back in at least partially, but others remain on the sidelines with cash.
Since March 9, the TSX composite index has risen 24.7%. This represents between 2 and 3 years worth of average stock markets gains. Stock prices may yet reverse after this recent rally, but what if they don’t?
Will the market timers return when the TSX gets to 10,000? If not, then maybe 11,000? No bell is going to ring to let everyone know that the sharks are gone and it’s safe to get back in the water.
For every market timer who crows about selling high and buying back in at low prices, I’m betting that there are two or more less talkative market timers who sold low and will ultimately buy back in at higher prices. I’ll stick to my strategy of staying fully invested through the ups and downs.