I've seen a large number of posts asking whether it's better to invest now or wait for a correction. Here's a link to my new favorite paper on the subject that I recently read, titled "When (If Ever) Has it Paid to Wait for a Stock Market Correction?":
It's a short and easy read. Of course, the results aren't surprising and they support the usual adage that "Time in the market beats timing the market". They considered a wide range of target "dip" levels from 1% up to 10%, and a range of wait times from 1 year up to 5 years. Even waiting 1 year for a 1% dip cost about 4% in missed returns on average. Waiting longer or waiting for a deeper dip generally resulted in even higher costs.
Just wanted to share. I'm not wholly against market timing but my preference is for strategies with a history of positive excess returns rather than negative.
Submitted January 02, 2018 at 02:02PM by big_deal http://ift.tt/2CsvtH3
