Market Timing vs. Buy-and-Hold: Why Rising Margin Debt Is Flashing a Warning

Callum_Thomas
06-30 07:10

We've become accustomed to markets just trending and going up over time, but there are plenty of examples across history and geographies of markets that just range.

This 25-year period of time in Japan was one for market timers and not long-term trend followers.

(...albeit there are clear trends on shorter frames within this period)

If you missed the 10 Worst days in the market, your returns would be materially better than the index.

So, should we therefore attempt to time the market?

Most finfluencers only tell you about the red line, so what is the intellectually honest approach here??

Adjusted for market movements, margin debt is still expanding at a rapid pace.

Yes this is a warning sign.

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