Marketplace Morning Report, a national radio show with more than 14 million listeners, cited a research paper by Willis Investment Counsel on the risks of investment timing during its January 16 program as part of National Public Radio’s morning news show lineup.
Morning Report host David Brancaccio and senior Marketplace reporter Nancy Marshall-Genzer were discussing the recent rise of the Dow Jones Industrial Average as it inched closer to the 30,000 level. It’s a tipping point that causes investors to become especially nervous and contemplate whether to sell and exit the market, the reporter said.
Cautioning her audience, Marshall-Genzer referenced a white-paper study by Willis Investment Counsel that revealed how investors typically lose from one to two percent a year in their stock investments when attempting to time the market. The Willis white paper, “The Investment Highway,” researched tactical asset allocation and resulting “timing leakage,” which is the difference between the published or theoretical return rate of a strategy, portfolio, or fund compared to actual earnings.
The white paper, which was also highlighted in Institutional Investor magazine, was based on academic research – including findings from Morningstar, the Vanguard Group, Research Affiliates, and others. This research was reviewed by professors at Emory University and George Mason University.
The Morning Report is produced by Marketplace, a national nonprofit news organization whose mission is to raise the economic intelligence of the country.
Link to Jan. 16, 2020 Marketplace Morning Report Podcast
Link to Institutional Investor magazine article
Institutional Investor – “No You Almost Certainly Cant Time Markets” PDF