"Trying to time the market is a fool's game and a lot of people have a lot less mettle than they think. I've heard friends talk about I'll pick up *X* at $5.00, then it goes to $4.50 and they say they'll pick *X* up at $4.00. Next year it's at $7.00 and they're wondering what the hell happened. Time moves quick, a blink of an eye and you've lost your opportunity. To me, over the next 6 months, this is definitely an opportunity not just on APX, but the general market."
This one is not about timing the market but timing the end of a market crash. It's a big difference. A market crash and its subsequent recovery to former levels will normally take years, and therefore especially for people near retirement it makes plenty of sense to prioritise the preservation of capital. So I wouldn't be so judgemental of people getting out when the going gets tough, it is not necessarily of question of "mettle".
Speaking of a fool's game, what seems rather foolish to me is to set buy prices out of the blue, based on a company's valuation prior to a market crash, knowing that the virus continues to spread like crazy, that containment efforts and lockdowns are expanding, that we may find ourselves in a global recession if this lasts, and that company earnings will be severely affected far beyond the end of both the virus spread and the containment efforts. In this context, it just makes no sense to me to be throwing money at the market, even if history tells us that in the long run the market will recover. It is like throwing darts in the dark.
Most successful investors will tell you that the best course of action at the moment is to wait until there is more clarity on the future. Case in point: anyone who tried to catch a falling knife at the beginning of December 2018 found himself in a deep hole by the end of that month because the market was still in free-fall mode, whereas by the middle of January it was quite clear that the storm had passed. Sure, anyone investing then would have missed the initial 10% rise but would have made more money than whoever invested early December (and would have slept better too).
Missing the initial phase of an initial bull market is really not significant when considering that a 50% drop in the stock market requires a 100% increase to get back to the same level. If you buy now and your stocks drop another 10%, you will need a 20% increased to make up for the fall. And if we do get into a recession, which is very possible, the markets will drop a lot more than that, and the companies in which you in vested will also be valued a lot less because their valuations will reflect expected earnings.
Lastly, if you look at the charts during the GFC, you will note during the 18-month period that the market crashed (October 2007 to March 2009) there were a lot of ups and downs, and sometimes the rallies were huge and lasted weeks, but inevitably failed. It is easy to be lured back into the market when this happens. Patience is the name of the game here. Anything else is a gamble, and I have no interest in gambling with hard-earned money.
Best of luck.
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