If that were true, it would be easy to make money by shorting when mutual fund inflows are high and going long when they are low. But there is no evidence that this strategy makes excess returns over a simple buy-and-hold strategy.
“But there is no evidence that this strategy makes excess returns over a simple buy-and-hold strategy.” ...Thank you riverdawg for buying and holding, because market timers couldn’t borrow your shares for short positions otherwise.
Very happy that I bailed in January of 2000 only to get fully invested in March of 2003. I unloaded my speculative real estate holdings in 2006 (Ameriquest was beginning to crack)and bought 3 properties in various markets during 2009-2010 for $.30 on the dollar at the peak.
Sold out my long equity positions in December of 2007 when all the talking heads on CNBC said the globe was awash in liquidity (sure sign of the apocalypse) and re-entered with gusto again in March of 2009 when the the S&P broke below 800.
I’ve incrementally sold half of my long positions since October of 2011. Will likely follow Gundlach’s advice and short the S&P soon along with a long position in FXI.