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I'm looking for a (free) paper I read which showed that even a "perfect" market timing strategy wasn't very good compared to buy-and-hold. There were some restrictions to the timing, something like: you buy at the lowest point between all time highs and sell at each all time high...and they concluded that it still wasn't a very good strategy because you spend a lot of time not invested.

Anyone know this study?

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  • $\begingroup$ Was my answer helpful? In that case, it is good practice here to upvote and accept the answer. Thank you, best h $\endgroup$
    – vonjd
    Apr 30, 2022 at 9:33

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In the long term, you will outperform buy & hold with a market timing accuracy of > 65%.

See these papers for more:

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  • $\begingroup$ Did you mean "Will not outperform..."? $\endgroup$
    – Robert Harvey
    Apr 26, 2022 at 22:22
  • $\begingroup$ @RobertHarvey No, I mean it the way it says there. The better your market timing abilities the better your chance of outperforming buy&hold obviously. $\endgroup$
    – vonjd
    Apr 27, 2022 at 6:27
  • $\begingroup$ Your choices for proofs are not exactly ringing endorsements. The first one says that portfolio managers could have gotten 59 percent accuracty with random choices. The second one is behind a paywall. $\endgroup$
    – Robert Harvey
    Apr 27, 2022 at 13:25
  • $\begingroup$ @RobertHarvey: This statement does not contradict the other statement. Concerning the paper: my colleague Prof. Dr. Google might help you find a free version ;-) $\endgroup$
    – vonjd
    Apr 27, 2022 at 14:42
  • $\begingroup$ Are you simply asserting that if you get timing accuracy of >65%, you will outperform buy and hold? If that is even true (and I doubt that it is), what is your proposal for obtaining greater than 65% timing accuracy? Because you won't get it with the first paper's strategy. $\endgroup$
    – Robert Harvey
    Apr 27, 2022 at 14:52

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