A tale of two plunges

Summary by tables

Again, the dates are not exact and they depend on the individual interpretation. I use my own dates and interpretations in the following tables.

Order the book Debunk the Myths in Investing (amazon.com) to see how to find the exit and reenter points. Do not try to save the $10 (penny smart but pound foolish) and miss the signals on the exit point of the next market plunge and how to reenter the market to have the best return in the market cycle.

Table: Market Plunges

Market Plunge	Months (Peak to Bottom)	Loss	Annualized loss
2000	17	56%	40%
2007	25	47%	23%
Average	21	51%	31%

Table: Vital Dates

Market Plunge	Peak	Bottom	Indicator Exit	Indicator Reenter
2000	08/28/00	09/20/02	10/30/00	05/26/03
2007	10/12/07	03/06/09	01/03/08	09/08/09

As of 9/11/2013, my charts (simple to get from Yahoo!Finance) have not issued an exit. Run the simple chart once a month. When it indicates a potential market plunge is closer, run the chart once a week.

 

Unbelievable return with market timing

Calculate how much you made if you followed the exit points and reenter points from 2000 to today. I bet you will make a good fortune. 

I calculated the return of S&P 500 with and S&P500 without market timing from 1-2000 to 8-2013 to test the effect of market timing.

I cannot believe it is that much better.

Click here on how I calculated the returns.

http://tonyp4idea.blogspot.com/2013/09/incredible-return-with-simple-market.html

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My e-book Debunk the Myths of Investing could save you a lot of money in investing. The above is one chapter out of 133 and some important chapters will not be included in the blog.
  http://ebtonypow.blogspot.com/2012/12/special-debunk-myths-of-buffett.html

Sample portfolio for the book.
  http://stockportfolios.blogspot.com/2013/03/welcome.html

(c) 2013 Tony Pow

Disclaimer. I'm not responsible for your actions in your investment. Treat this as educational information and past performance does not guarantee future performance.