Wouldn't it be nice if you were only in the stock market when it was going up and have everything transferred to cash while it is going down? It is called 'market timing' and your broker or financial planner will tell you "it can't be done". What that person just told you is he doesn't know how to do it. He doesn't know his job.
Even the Federal Reserve wrote an article saying that market timing does out perform the S&P500 index which is one of the best market directional indicators.
There are many advisory services that offer market timing. If you search on the Internet under "Market Timing" you will find them or you may look in various publications such as Technical Analysis of Stocks and Commodities magazine or Investor's Business Daily newspaper. Once you have found several you will find that some have several buy and sell signals each year and a few average only one timing signal per year. Here it depends upon your personality and your approach to the market.
For the active trader the more signals the better and for the longer-term investor the slow signals are best. You will have to do your homework and will want to send for a trial subscription to their newsletters. You might have to try several until you find one you like.
Instead of subscribing to an advisory letter you may decide to make up your own timing signal. It will take some initial work, but once done you will not have to pay anyone else for the service.
Most of these timing methods use two a simple moving averages of from 50 days to 200 days plotted with the S&P500 Index or the NYSE Composite or the Nasdaq Composite if you are investing in the high tech stocks or mutual funds. Yes, this definitely works with mutual funds. The longer the time of the moving average the less frequent will be the Buy and Sell signals. The signal is generated when the index penetrates the moving average line. When the index is below the moving average and goes through it to the upside you have a Buy and visa versa for the Sell. Nothing complicated.
If you want to piggyback the work of Investor's Business Daily look at their Mutual Fund Index where they show both a 50-day and 200-day moving average lines. Both of these methods gave sell signals last September/ October. Would your investments have been more profitable if you had gone to cash at that time? Probably. The 200-day line still has you in cash while the 50-day line had a Buy/Sell in January and a new Buy about April 20.
Basically what market timing does is protect you from any big loss in a bear market. The first rule for all smart investors is to protect their capital. If your broker does not know how to do this you need a new broker.
It's your money. Keep it.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
http://www.mutualfundmagic.com; 1-888-345-7870
Airbnb cleaning service Arlington Heights ..What! Me worry?Many of you remember the cover of MAD... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
In his wonderful book, 'Multiple Streams of Income', best selling... Read More
In one of my previous articles (Investing in the stock... Read More
When the stock market is going up and all your... Read More
Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More
We have two candidates for president that have really different... Read More
When most analysts, financial planners, fund specialists and investors try... Read More
Mutual funds by definition are a mixed bag of stocks,... Read More
How many people went to a cash position this week?... Read More
In 1960 an engineer working for a watch company in... Read More
Did you know you can make money (and a lot... Read More
Congress recently passed another new law that is supposed to... Read More
I continually hear from economists, talking heads, other market letter... Read More
Who are the successful investors?There are those who follow the... Read More
Let's assume that you want to make some serious money... Read More
What account size do I need?How much money can I... Read More
Humpty Dumpty had a great fall and all the King's... Read More
'Sector funds are too risky.' 'I doubled my money with... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
There has been great condemnation recently because China has been... Read More
If you don't know where you are going any road... Read More
Before we get into all the good news out there,... Read More
It looks like we have now entered a new bull... Read More
reliable maid service Winnetka ..Sometime around 1980, can't remember exactly, there was a flight... Read More
The following are a list of nine things you want... Read More
There are many important things you need to know to... Read More
Have you bought any mutual funds this year or late... Read More
Index Fund Trading can be one of the most profitable...or... Read More
Question: How does it get better when it gets worse?Last... Read More
Every broker and financial planner will tell you that you... Read More
During the day I watch CNBC-TV, the stock market channel.... Read More
A common problem I often see when working with living... Read More
Over the past few months, several investment professionals have brought... Read More
Caught in a whirlpool and being sucked under. No life... Read More
Sometimes the best way of lowering exposure to risk is... Read More
What are you thinking when it comes to your no... Read More
This is a rather simple strategy with which I am... Read More
Time to look back2004 is over, now we are in... Read More
The trading method you employ to approach the stock market... Read More
We are already in it, but you can't see it.... Read More
I read a comment by a forum member on another... Read More
That sounds like good advice doesn't it? Don't lose all... Read More
You read and hear a lot about hedge funds. Unfortunately,... Read More
The Winter Games for the Olympics are coming up soon... Read More
When you stand on the ocean shore and watch the... Read More
If you haven't heard of the technical indicator with the... Read More
The basis of diminishing return discussions surround such simple notions;... Read More
Are you attracted to the idea of being in control... Read More
Stocks & Mutual Fund |