His strategy involves market timing to some extent, although Arnott said "we don't think of ourselves as
market timers because we don't try to pick the tops and bottoms.
'Statistics show that most
market timers actually underperform investors with a buy and hold strategy.
In other words, value fund investors are not true contrarians but
market timers, succumbing to the behavioral pitfalls that snare investors in growth and other market styles.
"We're not
market timers. Oil prices could continue to stay low and there's no way to predict that, but what's important for clients to understand is that their allocation to energy or any other sector is just a part of their overall portfolio.
Redemption fees were historically used across the mutual fund industry to discourage
market timers, but improvements in technology and pricing practices have reduced the risk.
"
Market timers tend to be lousy investors, and numerous studies show that they underperform those who buy and hold," says Kevin Brosious, a Pennsylvania-based, fee-only certified financial planner and public accountant.
They show that, two or three years after the offering, there is no significant difference between the leverage ratios of
market timers and other firms.
In some cases, that recovery has represented missed opportunities to recuperate much of what was lost." Bottom line: A University of Michigan study found that, over a 30-year period,
market timers averaged an annual return of 3.28% whereas long-term-minded investors averaged 11.83% per year.
Founded in 1986 on the philosophy that strength, growth and the diversification of their client's hard-earned money is made possible through knowledge, diligence and years of experience, Banyan Rock & Talent specializes in areas including stocks, bonds, mutual funds, variable annuities, retirement strategies,
market timers, life insurance, disability insurance and applied real estate.
SOME PEOPLE SAY THE
MARKET TIMERS ruined it for everybody.
However, the overwhelming evidence is that even professional
market timers cannot consistently outperform the market.
He was ranked one of the "Top Ten Stock
Market Timers" (including a #1 ranking).
