The truth is, almost everything about superior investing is a two-edged sword:
-If you invest, you will lose money if the market declines.
-If you don’t invest, you will miss out on gains if the market rises.
-Market timing will add value if it can be done right.
-Buy-and-hold will produce better results if timing can’t be done right.
-Aggressiveness will help when the market rises but hurt when it falls.
-Defensiveness will help when the market falls but hurt when it rises.
-If you concentrate your portfolio, your mistakes will kill you.
-If you diversify, the payoff from your successes will be diminished.
-If you employ leverage, your successes will be magnified.
-If you employ leverage, your mistakes will be magnified.
HT Howard Marks.