QCM NexusOne Insight # 2

February 2025

Aref Karim - Ershadul Haq - Raami Karim

THE MYTH OF MARKET TIMING

WHY STRATEGIC AGILITY BEATS PERFECT CALLS

Timing a Dream

Everyone wants to buy low and sell high. Everyone wants to get out before the crash and back in before the rebound. That is the dream of market timing. And it is one of the most persistent and possibly damaging myths in investing.  The logic is understandable: if you can avoid drawdowns and capture the rallies, your returns and wealth will soar. But simple is not always easy. We explore why market timing is so difficult, what the consequences of getting it wrong can be;  and why strategic agility, not prediction, offers a more reliable path for long-term investors.

Why Timing Sounds Appealing

There is something seductive about the idea of being one step ahead of the market. If you could exit just before a downturn, and re-enter before a rally, you would:

- Avoid drawdowns

- Smooth returns

- Boost long-term compounding

Some investors occasionally get it right, but rarely consistently – and that is the issue. Successful timing requires not just foresight, but precision and the willingness to act in the face of uncertainty. Consistently doing that is extremely rare.

Why Evidence Suggests Timing is Hard

Decades of research confirm:

- Most active average investors underperform the funds they invest in due to poor timing

- Missing just a few of the market’s best days drastically erodes long-term returns

- Even professional managers struggle to time macro shifts with any consistency

The reason why it is so hard is because timing is not one decision,  it is two: when to get out, and when to get back in. Both need to be right, not just in direction, but in timing. A good call made too early can be just as costly as a bad one.

The Cost of Getting it Wrong

Imagine an investor exits the market fearing a downturn. If they are wrong, or simply early, they miss the upside. Even if the exit is timely, the re-entry is usually harder.

The reason is often because rebounds tend to be fast and sharp. By the time news turns optimistic again, markets have already moved. This often leads to:

 - Sitting in cash too long

 - Missing recovery rallies

 - Buying back in at higher prices

 - Diminished compounding over time

The result is a portfolio that consistently lags, not because the market was difficult, but because the investor was out of position.

A Better Alternative: Strategic Agility

Rather than trying to make perfect calls, robust strategies embrace strategic agility.  This is the ability to adapt exposures based on objective, data-driven conditions. 

This is the core idea behind systematic macro: not forecasting outcomes but preparing for a range of scenarios and shifting as the data evolves.  That means:

- Staying invested in a broad, diversified, risk-controlled way

- Scaling up or down exposure as volatility or signals shift

- Rebalancing regularly without emotional interference

- Following a tested, repeatable framework.

NexusOne Insight: Market Timing

At QCM, our systematic macro strategy does not believe in calling tops and bottoms. We do not make concentrated bets on a single view. Instead, we focus on adaptability achieved through a systematic process.

Our strategies therefore:

- Combine diversified sets of trend, mean-reversion, and volatility signals

- Adjust exposure dynamically across global futures

- Apply structured risk overlays that respond to changing market regimes

- Rebalance proactively based on evidence -  not emotions

We believe that staying invested with structure is an underrated edge. In a world where uncertainty is the rule, not the exception, agility beats accuracy.