SmartStops comments: It’s befuddling that this statement continues to get touted around – “But isn’t this market timing? We all know, after all, that timing the market is pure folly!” .. when indeed guru’s like Andrew Lo, MIT have blown this “myth” apart again and again.
Now the below is a very true statement and why active risk management is indeed the smarter way to protect gains in our 21st century markets – and a much different beast in its behavior then the 20th century.
from article: What happened was the two major bear markets from 2000 to 2002 and again from 2007 to 2009. Putting this simply, longer-term investors have spent much of their time over the past eight years simply making their way back from the losses that they had sustained twice in the nine-years prior.
Wishing that more people understood the opportunity costs in believing that it’s still just diversification they should be relying on to minimize their risks.