Question

Bogleheads believe in market timing provided an advisor is carefully chosen. a) Do you agree with the above statement? b) What strategy works best for investing? c) If your portfolio's value decreases by more than the market what is one explanation? d) Are you a boglehead? Why or why not?

Answer 1

A.

I do not agree with the statement, because market timing is one aspect that is important for investment to be successful. If market timing is good, advisor is also very good, but investor's needs are not carefully understood and investment assets are not carefully chosen, then investment will not give good return. Hence, a good return, demands proper selection of investment assets, consideration of investor's priorities in terms of risk & return, market conditions among with the timing and advisor's profile.

B.

When the strategy is active and regularly selects underpriced assets for investments and releases overpriced ones by cashing on it, while considering the marketing timing, then it is a good strategy for investment. Here, the final decision should consider the fair or intrinsic value of the asset or stock so that investment is based on reasoning.

Simply working on market movement or technical analysis, will create more than than the good.

C.

One explanation is that investments were done when stocks or assets were overpriced and market was booming. Now when the market has corrected and assets have achieved the fair price, the value of portfolio has decreased by more than the market. Here, investments are also not made to be diversified investments.

D.

I am not a boglehead, because I rely on the fair value of the assets and its over and under pricing position in the market, rather only relying on the market timing.