My rough calculation on how much money Joanne & I "made" on the market yesterday is roughly $5000. Pretty good for not doing anything. Of course my projection was that we'd lose roughly $3000 of that today. Not the case so far...
Last night we discussed the effect a single event (drop in interest rates) had. Joanne commented that it was obvious/known that rates would drop (though a bit of a surprise how big of a drop it was), so why wouldn't everyone buy a week ago? Or sell now?
Well, that kind of timing tends not to do a whole lot of good. Pretty much everything went up 2-3% yesterday. To have the money a week ago to invest means you have idle money. To sell now creates the same situation. If you happened to have idle money yesterday, you just missed out on a large chunk of this years gains. And any benefit of selling now, unless its to free up cash for some non-investing purpose, doesn't do much good because everything just got more expensive.
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Well observed. Same principal applies to the housing market. As long as you are buying & selling in the same marketplace, trying to time the market is basically a false proposition. Which is why even a crappy market like we have now still presents plenty of good opportunities for folks who want to move.
This is *not* true if you are entering or exiting the market - ie, for first-time buyers, people relocating to a new region, or people cashing out to buy that yacht they are retiring to. If you are in that position (essentially, with idle cash or looking to create idle cash) market timing can be a big deal.
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