The Trump Slump

You Can’t Time the Stock Market

Should you now sell or reduce your ETF holdings, especially in the U.S., and heed JPMorgan’s trading desk “tactical bearish” call?

That rarely works.

Such calls typically have no predictive value. With hindsight, you can always find people who called it right. Take, for example, my ex-colleague Dr. Doom (Professor Nouriel Roubini), who accurately predicted the depth of the U.S. subprime crisis. I used to spar with him—in fact, I called the crisis two years earlier when it was my job at the IMF to predict and help prevent crises. This goes to show that even if you are right, it doesn’t mean you’ll get the timing right.

At Pensionfriend, we follow a buy-and-hold strategy. Only when we see fundamental shifts in a country’s or bloc’s capacity to generate long-term growth will we recommend a shift. Why? Precisely because market timing is horribly difficult, often wrong, and requires extraordinary pragmatism—you need to be agile enough to reverse your position on short notice. This approach only works in a hedge fund or trading desk environment, and even then, only part of the time.

The chart below tells the story: If you missed the 10 best trading days in the last 20 years, your long-term returns on the S&P 500 would have been more than halved. Trying to time the market—waiting for the “perfect” moment to buy or sell—often leads to missed opportunities.

Our Approach: Stability with Smart Adjustments

While we stick to long-term investing, we do incorporate a built-in stabilizer. Our system automatically adjusts allocations between small-cap and large-cap stocks, as small caps tend to react more strongly to market fluctuations. This allows for some automated selling high and buying low.

Thanks to our tax shield, we can rebalance ETFs without exposing our customers to taxes. Additionally, we do not charge trading costs. While the impact may not be massive, small advantages add up over time—and with compound growth, even modest gains can become significant.

The Bottom Line

Time in the market beats timing the market.

If you’re still concerned, let us know—we can review your portfolio’s risk level and discuss whether a gradual risk adjustment is right for you.