Re: "What metrics do we use to determine 'right or wrong'."
I understand that you didn't or haven't acted on Bob's advice. If this is correct, your evaluation of whether Bob was 'right or wrong' is theoretical and/or subjective. However, for those of us who acted based on his advice, each individual will come up with his own evaluation. These evaluations, which will be based on actual portfolio performance, will differ depending on the specific equities and equity funds that were sold and kept.
As an example, marc ultra's assessment is already somewhat different from mine. marc reports that he had a pretty good week, indicating that his assessment would tend to support the "right" side of the question. On the other hand, my sales of CYMI, PBTCX, SRFCX, and others would tend to support the argument that I sold early.
Second, the time period in which the 'right or wrong' judgement is made will affect the conclusion reached. Those expecting a large correction followed by a buying opportunity in a couple of months will be making their judgements based on the market action over the next couple of weeks. Those folks will be posting messages ridiculing Bob's call in a matter of days or weeks if the market doesn't immediately plunge.
Others (probably the older, more experienced investors) would likely accept weeks or months of sideways or slightly higher equity prices before they make the "right or wrong" judgement.
The third thing that will effect the "right or wrong" assessment is the investment style of the individual. The short-term traders who try to sell at the top of each minor correction and buy back at the bottom of the next dip will accept only an error of perhaps 5%. On the other hand, those who are simply trying to avoid those periods like 1966 to 1982, where the market dropped over a 16-year period, might accept an error of 10 or 15%.
I'm sure that all of the different perspectives will certainly lead to a lively discussion over the next few months.
Best wishes,
I2 |
