Morningstar Advisor magazine, a publication from Morningstar tailored to the advisor population, consistently produces high quality commentary and analysis on investment topics. One of my favorite articles was published way back in 2013 relating to market timing; I.e., the ability to be in the right asset class at the right time to pick off every inflection point in market volatility.
In the article titled, “The Existence of Market-Timing ‘Intelligence’”, they quoted a study showing what could be gained if an investor had perfect foresight. In other words, what is the best someone could do if they called every market rally and dip. The article states that from 1926 to 2011, if an investor correctly chose the right bond or stock mix each month the total return would have been 31.9% annualized; a value much higher than the long term stock-only portfolio of about 10%.
The difficulty remains, however, to be able to find the manager “ahead of time” who has the ability (or luck) to be successful in this endeavor.