Market timing a 'fool's game'

The Ticker

December 06, 1990|By Julius Westheimer

Do you try to "time" your stock purchases? Money magazine, November, says, "Trying to time the stock market is a fool's game."

The story goes on, "timers have a dismal long-term record. The stock market's tendency to rise over time favors 'buy-and-hold.' Since 1926, according to Ibbotson Associates, stocks have risen in more than two out of every three years. In effect, then, the buy-and-hold decision is right better than two thirds of the time, a feat few timers could match. Stand-pat investors are always right when it matters most -- in bull markets. Therefore, you're better off absorbing a bear market to be sure of catching the full bull. The typical bull market lasts 33 months."

LOCAL LINE:

Steven Bloom, Arthur Andersen & Co. (727-5800) will mail "Surviving Spouse's Checklist: A Tool to Evaluate Your Preparedness" if you phone him . . . Call Patrick Larkin, A. G. Edwards & Co. (547-1131) for a colorful and helpful "Tax Saver" booklet . . . Financial World, Dec. 11, runs an article, "Black & Decker: Shortsighted Short Sale." ("Slack Christmas and recession may hurt a bit, but don't look for the Baltimore toolmaker to disappear any time soon.") . . . Security Analysts hold "Environmental Panel," Dec. 13, Tremont Plaza, noon . . . Tomorrow night, "Wall Street Week with Louis Rukeyser" looks at "The Market for 1991 and Beyond." . . . Baltimore County public libraries have free updated copies of "Resource Directory for The Small Business Owner." Phone 887-6196.

MARKET WATCH:

"Short-term, stocks will rise. Long-term, they'll go much lower because of mounting debt and depression possibility." (Martin Zweig) . . . "I'm a long-term stock investor, but we're in a bear market rally now. However, signs do point to lower interest rates." (Beth Dater) . . . "This looks like an intermediate top, time to go short again. Next Dow target: 2,250." (Adrian Day's Investment Analyst) . . . "Several factors lead me to believe that stocks' slide since July is ending." (Eakle Report) . . . "Long-term, we're in the clutches of a bear market, but we're in its late stages." (Professional Tape Reader) . . . "Fact that recent rally stopped below 2,600 indicates great weakness." (Wellington Special Bulletin) . . . "Become more humble as the market goes your way." (Bernard Baruch, 1926)

DEADLINES NEARING:

"If you earn self-employed income, you may reduce your tax bill by as much as 25 percent -- up to $30,000 annually -- while saving for retirement. Self-employed people know that saving for retirement is a must, and by selecting a Keogh retirement plan before Dec. 31, 1990, you can prepare for a comfortable retirement future." (Investment Vision) . . . "Forget the mistletoe and break out the calculator: There's still time to see whether it's possible to reduce your 1990 tax bill." (Wall Street Journal article worth reading, with examples, Dec. 4). Ticker suggestion: Since the new tax bill treats different people differently, see your accountant promptly.

DECEMBER DIARY:

Although the year's shortest day is two weeks away, tonight marks the year's earliest sunset, with evenings beginning to brighten in the next few weeks. Sunrise lags until Jan. 8 . . . "Home-buying time may be here; mortgage rates were up but are now declining." (100 Highest Yields) . . . "The Hemline Index of Stock Prices, which has correctly forecast the stock market since the early 1920s, now projects a market bounce-back, with fall/winter fashions showing some mini-skirt lengths over six inches above the knee." (Smart Money, December) . . . "Stephen Leeb, Indicator Digest, flashes Wall Street green lights: drop in T-bill rates and significant decline in industrial commodity prices." (Dick Davis Digest, Dec. 3) . . . "Two proven ways to profit in bear markets: (1) buy stock in undervalued companies poised for a comeback and (2) sell overvalued stocks and bonds short." (James Rubin, M. D. Sass Investors Services).

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.