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  • Mar 5th, 2006 1:19 pm
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Deal Addict
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Jul 20, 2002
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3 words for you: Dollar Cost Averaging (Google it)

Forget about trying to time the market if you're serious about investing for the long run.
Deal Addict
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Apr 29, 2002
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advantage21 wrote:3 words for you: Dollar Cost Averaging (Google it)

Forget about trying to time the market if you're serious about investing for the long run.
Looking at about 3-5 years.
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Jan 19, 2005
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Long-term trend is up, so the earlier you buy the better.
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simms wrote:Looking at about 3-5 years.
Your time horizon is too short for investing in the Market, your investment could easily be down 15-20% in that period before going higher. If you are counting on using the money in 3-5 years, stick to a GIC. It might be boring, but it's safe.
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Apr 29, 2002
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advantage21 wrote:Your time horizon is too short for investing in the Market, your investment could easily be down 15-20% in that period before going higher. If you are counting on using the money in 3-5 years, stick to a GIC. It might be boring, but it's safe.
I don't mind risk, I could lose 30% of it and I'd be OK with that. Just wondering if market timing is reasonable given that I want to invest for around 3-4 years.
Deal Addict
Mar 22, 2005
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You can speculate all you wish, but market timing is equivalent to gambling. On the other hand, you can remove all the guess work if you look at the stock market long term. As long as the world continues to grow, so will businesses and thus stock markets.

For instance, less than two decades ago the TSE was somewhere around 2000 points. It doesn't matter whether you bought at 2000, 1900 or 2100 because it's over 11,700 now. In the year 2020, it won't matter whether you buy at 11,700, 10,700 or 12,500 because the index will probably be over 40,000.
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Jul 20, 2002
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simms wrote:I don't mind risk, I could lose 30% of it and I'd be OK with that. Just wondering if market timing is reasonable given that I want to invest for around 3-4 years.
A lot easier said than done. Imagine yourself buying the TSX at 11,000 in 2000 and then watch your investment tank to 6000 3 years later. Would you really tell yourself it's OK or would you have bailed? (And missed the run back to 12,000 3 years later?)

BTW, there are a ton of studies to show market timing cannot be done consistently. But another man once said, "there's one born every minute..."
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Feb 3, 2005
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simms wrote:http://www.cbc.ca/story/business/nation ... ml?ref=rss

I was going to put some money into Cdn/US/Intl indicies, but it seems like the Canadian market is going down soon enough, especially if the bank is increasing interest rates in about a week.

Would you invest your money in indexes right now, or drop it in a GIC and see what happens?
Like an above poster has said, forget about timing the market, just get in if that's what you want. The market has already factored in at least 1-2 rate hikes, so when the official word comes, it should not have an impact.
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Jul 27, 2004
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advantage21 wrote:A lot easier said than done. Imagine yourself buying the TSX at 11,000 in 2000 and then watch your investment tank to 6000 3 years later. Would you really tell yourself it's OK or would you have bailed? (And missed the run back to 12,000 3 years later?)
yeah, and those are the ppl that try and time the market. in a bull market they'll resist investing because they don't want to be the idiot buying at the top and wait for a correction, yet the market keeps on chugging along. when they finally cave and invest all of their money that's prob pretty close to a top. then when the market enters a major correction, they'll get nervous, watch themselves lose capital month after month, and sell near a market bottom.

need proof? look at fund flows near the top of the market in 1999-2000 and the bottom in 2002.
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Feb 7, 2006
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sparkplug wrote:You can speculate all you wish, but market timing is equivalent to gambling. On the other hand, you can remove all the guess work if you look at the stock market long term. As long as the world continues to grow, so will businesses and thus stock markets.

For instance, less than two decades ago the TSE was somewhere around 2000 points. It doesn't matter whether you bought at 2000, 1900 or 2100 because it's over 11,700 now. In the year 2020, it won't matter whether you buy at 11,700, 10,700 or 12,500 because the index will probably be over 40,000.
Well it's quite probable that the TSX doesn't continue going up...just look at Japan's market which is down -50% since 1990. Granted economic conditions there were much different than what they are in Canada today, but that's not to say that a scenario like that COULDN'T occur (even the U.S. markets have been relatively flat over the past 5 years or so).

As for interest rates, if you compare interest rates moves to the performance of the TSX, you'll see that there really isn't an incredibly strong correlation...the U.S. markets, for example, are much more sensitive to interest rates than the Canadian markets are...just something to keep in mind.
Sr. Member
Jan 13, 2005
981 posts
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Montreal
[quote="advantage21"]A lot easier said than done. Imagine yourself buying the TSX at 11,000 in 2000 and then watch your investment tank to 6000 3 years later. Would you really tell yourself it's OK or would you have bailed? (And missed the run back to 12,000 3 years later?)

The Market was NOT at anywhere near 11000 in 2000.
If you are convinced that you are right, go ahead try to time the market.
What tools are you using for that ?
(other than saying: it must be high therefore it should go down)
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Jul 20, 2002
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KAN wrote:The Market was NOT at anywhere near 11000 in 2000.
If you are convinced that you are right, go ahead try to time the market.
What tools are you using for that ?
(other than saying: it must be high therefore it should go down)
Dude, there was this thing called the Nortel effect and TSX was hovering around 11K back in Y2K. Maybe you weren't, but I was there, back then.

http://finance.yahoo.com/q/hp?s=%5EGSPT ... f=2001&g=w
Jr. Member
Jun 12, 2004
145 posts
simms wrote:but it seems like the Canadian market is going down soon enough, especially if the bank is increasing interest rates in about a week.
How are you sure the market will go down? Why don't you just short it. Oil and Gas is hot. Increasing interest rates may not have any effect, who knows?

If someone in this forum can predict the market is going up or down, I don't think he/she will be in this forum.
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Dec 20, 2004
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Banks are reporting record profits... gold and metals prices continue to rise exponentially... and instability overseas keep pushing oil and energy prices up. Now is a good time for Canadian investors.

I am also investing for the short term in ETF/Mutual Funds (3 years or so), and while I do understand there is some risk, I think it is completely worth the potential return.

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