how has market timing affected you and what do you think now?

[robh23]

how has market timing affected you and what do you think now about the companies involved. also how will it affect your investment choices once the economy gets going properly again?

 

[FeathersMcGraw]

It hasn't, because I don't.

 

[ggavinmoss]

Well "market timing" really isn't the thing that concerns me, it's late trading. If your contributions are received by the firm in question after the required time and you get to buy at "yesterday's" price then that's messed up.

But capitalizing on upswings in one market before another opens should be monitored by your mutual fund company and those shareholders that do it should be kicked out of the fund.

-geoff

 

[robh23]

well you shouldnt be bothered about late trading the people involved are off the prison and management shouldnt have been aware.

the fact that market timing was legal basically is pretty shocking to me. it doesnt sound like you know what it is.

basically for a fee to the management company the fund manager let hedge funds buy in and out of the fund - ie your pile of money at a low price. this meant that the hedge fund had cheap access to the stock market and could cheaply trade the index for short term up movements. its called swing or range trading or just news/ event trading.

basically it disadvantaged investors by lets say you have a 1bn fund fully invested and the hedge fund puts 100m in and the index goes up 5%, the fund has 100m of cash and 1bn of stocks, so there is 50m in gains, spread 91%/ 9% between the investors and the hedge fund. that equals a 4.54% gain for the investors. then the hedge fund gets out and the market goes back to zero and the fund loses 5% - having only gained 4.54% on the upwswing. it it thought to have cost investors several billion a year. mutual fund companies were deliberately doing this.